The Lottery and Property Settlement

This matter was heard in the Family Court of Australia by Judge Stevenson.

The parties in this case had been married for 20 years before they decided to separate. In September 2009 their marriage was dissolved.

Their assets and liabilities would have been divided up 50/50. However, it was made more complicated when the wife won $6 million in the lottery six months after the parties had separated, but before they were divorced.

The question posed to the court was whether the winnings could be included in the property settlement. Obviously, the husband wanted a share of the $6 million.

The parties had sought to end their financial relationship and effect a property settlement. The husband contended that as the wife had gambled on the lottery every week throughout their marriage since 1980, he was entitled to a share.

After the parties had separated, the wife struggled financially. Her sister then began giving her between $20 and $50 per week to assist her. The sister also gave the wife her lottery playing card to use and told the wife, “This is for you. You can use some for the ticket. I will give you some money every week.”

The wife continued to buy tickets using money from her sister, money she had drawn from a loan and money from a tax return she had recently received.

Although there have been cases where lottery winnings have formed part of the property settlement, Judge Stevenson distinguished the facts of this case. Her Honour cited, Farmer v Bradley 27 Fam LR 316 where the husband had won a significant amount of money after separation from the wife. Farmer v Bradley was distinguishable as the wife had made a substantial contribution as the homemaker which had been made more burdensome during the marriage due to the husband’s drug dependency. Further, she continued to make a contribution in the form of looking after the children of the marriage post separation.

Here, the wife submitted that the winnings were not “property” under section 79 of the Family Law Act 1975 as the husband had made no contribution to it. However, the husband contended that the winning ticket had been bought with “joint funds.” Her Honour rejected the husband’s submission as it was impossible to point to the exact funds that purchased the winning ticket.

Judge Stevenson agreed with the wife that there should be two separate pools of assets to effect the property settlement. There was Pool 1 which consisted of all of the assets and liabilities of the couple as at the date of separation. Pool 2 consisted of the prize money. Pool 1 was to be divided up equally, but the husband had no entitlement to the winnings in Pool 2 as he had made no contribution to it.

Following this, the husband was not entitled to any of the winnings, he only received 50% of Pool 1. However, the husband was awarded $500,000 in recognition of the disparity in financial circumstances of the couple and the fact that the husband was 62 and had a limited future working life.

Divorce and separation is a difficult time for anyone, but when an extra $6 million is thrown into the mix, there is even more to fight about. Winning the lottery might be a blessing for some, but it might also cause a major headache. Lucky for us the chances of winning the lottery are pretty slim.