When a couple separates, a property settlement agreement decides how their net assets will be formally divided between them. If a winning lottery ticket was bought by one party during a relationship, it would be seen as joint property and dealt with in a property settlement. But what happens with a big lottery win after separation?
It may come as a surprise to learn that a lottery win post- separation could still form part of the settlement ‘pool’. Where the parties have conducted separate financial lives, the winnings will likely be considered a sole contribution of the purchaser. However, in other circumstances, the Court may decide to reward the future needs of the other party in support of a fair and equitable outcome.
In the case of Farmer & Bramley (2000), the husband won $5m on the lottery 18 months after the couple separated. There were no other significant assets, so no financial agreement had been finalised. The Court ordered that the wife be granted 15% of the winnings, taking into account her past support for her husband during a 12-year marriage and providing for their child’s ongoing care.
Relatively few people will be lucky enough to win a large sum on the lottery. However, the case law serves as a reminder that it can be advisable to formalise a family law property settlement as soon as possible.
If you need advice on the division of your asset pool after separation, please contact the family law experts at Szabo & Associates Solicitors on 02 9281 5088 or complete the online contact form.
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