Until there is a line in the sand between you and your ex-partner or spouse via a formalised property settlement, there is a good chance you will be required to share your lottery prize money even when the relationship is at an end.
Traditionally the Family Court has determined that any prize money won from a lottery during the course of a de facto relationship or marriage forms part of the property pool to be adjusted between the parties in the same way as any other tangible asset. This remains good law however it depends on the circumstances of each case as to how the Court will consider the prize money.
In the case of Zyk and Zyk (1995) the parties had been married for only two short years when the Husband had a lottery win of $95,000. In the Zyk’s marriage they pooled their respective incomes in a joint account and therefore the money for the purchase of the ticket made by the Husband had come from shared income. The Court determined that the winnings were a joint contribution of the parties. But is this always the case?
In the Full Court of the Family Court decision of Elford & Elford (2016) the Court dismissed the Wife’s appeal that she should receive a larger entitlement in the property pool which was largely comprised of prize money won by the Husband in a lottery. The basis for the Wife’s application being dismissed was that the Court determined that the winning lottery ticket was the sole contribution of the Husband and he was given credit for that significant financial contribution accordingly. In this case, the parties did not pool their money either before or after the prize money was won as in the case of Zyk.
In Elford the Husband retained his significant winnings in an account which the Husband was the legal owner of and he did not share the winnings with the Wife. The Court put significant weight on the fact that the Husband in this case had treated the winnings as his own property which was how the parties treated their respective assets and liabilities during the marriage. Furthermore, as the parties had maintained separate finances the Court found that the Wife did not contribute to the purchase of the ticket. The Court made the determination that the Husband’s lottery winnings were a financial contribution made by him and he was given additional credit for that financial contribution. However, the winning prize money still formed part of the property pool to be adjusted between the parties which enabled the Wife to receive a benefit of the winnings in any event.
It is important when separating your finances that you ensure you formalise any property settlement to avoid having to share any of lottery wins you may (by chance) be lucky enough to receive.