Recently in the United States, an arbitrator ruled that both parties were entitled to Tattslotto winnings despite the ticket being purchased by the husband after the parties separated. Mr Zelasko purchased the winning ticket in 2013 which ultimately led to a jackpot of $30 million. Unfortunately for Mr Zelasko, an arbitrator ruled the winning ticket was marital property and he was ordered to share half of his winnings with his former wife. The parties had been separated for more than two years and were in the midst of family law proceedings when Mr Zelasko received the prize money. The arbitrator ruled that the wife was entitled to the money because they were not legally separated despite their intentions to split.
In comparison, in Australia the Family Court has determined that any lottery prize money won during the course of a relationship will form part of the property pool to be adjusted between the parties. Therefore, lottery winnings are property for the purpose of family law proceedings and can be divided between the parties. Whilst the party who purchases the winning ticket is generally regarded as the contributor of the winnings, an adjustment may be made to lead to a just and equitable outcome. The Court will always consider the individual circumstances of each case to determine how the prize money will be considered in the property pool.
In the land mark case of Zyk & Zyk, the Full Court reviewed the way that prize money was considered in family law proceedings. Prior to this case, lottery winnings were viewed as a windfall and therefore not necessary viewed as an asset to be adjusted between the parties. The Court ultimately ruled that the winnings were a joint contribution of the parties.
In Farmer v Bramley, the wife was awarded $750,000 (15%) of the $5 million winnings from a tattslotto ticket that the husband had purchased post separation. The Court considered the wife’s homemaking contributions, the disparity in the parties’ assets and the wife’s ongoing care of the child without any financial assistance or support from the husband.
In the Full 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. The parties did not pool their money either before or after the prize money was received and the Court therefore allowed the Husband to retain his significant winnings which he received 12 months into the marriage. The Court found 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 by the parties and this enabled the wife to receive a benefit from the winnings in any event.
It is vital to formalise any property settlement to provide certainty and finality into the future and to avoid having to share any lottery winnings you may be lucky enough to receive.