In a marriage or de-facto relationship, lottery wins acquired during the marriage and after separation can be part of the matrimonial pool available for distribution during property settlement under the Family Law Act 1975. The most important question is by whom the contribution was made.
Contribution of both parties
If both parties receive a source of income and the marriage or de facto relationship is based on each party contributing their respective income towards the relationship, then the lottery ticket win may be regarded as a purchase from joint funds. If one party is the sole income earner and the other party is involved only in the household activities, the purchase of winning the lottery may still be considered as a “joint and equal contribution”.
The Family Court of Australia has constantly held that if a lottery win is considered as a joint contribution, then the property must be distributed equally between the parties. In the matter of Zyk and Zyk (1995) FLC 92-644, it was held that there was a joint contribution to the savings of the husband and wife and in the purchase of their assets. Therefore, it was held that the winnings were used by the parties for joint purposes and was treated as a joint contribution.
Separate finances of parties
If parties lead financially separate lives and it is found that the winnings were not a joint contribution, then the lottery purchase can be considered as a sole contribution and the party who obtained the lottery ticket is more likely to keep a greater amount of the winnings.
It was demonstrated in Elford & Elford (2016) FamCAFC as the parties kept their finances separate throughout the entire relationship. The winnings of the lottery were placed into an account solely on the husband’s name and the winnings remained into that account. The appeal was dismissed on the basis that the husband made the sole contribution to the lottery winnings. It was stated that the wife had no greater share in the property pool. Hence, the judge upheld that the winnings were not a joint endeavour.
Common outcome of lottery winnings
Very often though, the Court will award the other party a percentage of the lottery winnings considering the future needs of the party. In Farmer v Bramley (2000) FLC 93-060, the husband won the lottery 18 months after separation in the sum of 5 million dollars however after assessing the wife’s significant financial and non-financial contributions throughout the twelve-year relationship, the Court awarded the wife with a sum of $750,000 which was approximately 15% of the winnings.
Therefore, depending on the situation and after assessing the financial and non-financial circumstances, the Court may decide to give a greater or smaller percentage of the lottery winnings to the party.
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