So you've won the Powerball. You and your spouse are overjoyed. Unfortunately, money can't save your marriage and you decide to separate a few years later. Perhaps it ends bitterly. So what happens to all the money that you've won? You bought the winning lottery ticket, so can you keep all of the remaining money? Let's find out.
When it comes to division of assets after a marriage or an equivalent relationship arrangement such as de facto, disputes usually go through the Family Court of Australia.
According to law firm Slater & Gordon, historically the Family Court favours a 50-50 split of lottery winnings won during marriage. That's because, generally speaking, financial responsibilities are shared between both parties. Many couples also have joint savings accounts.
The lottery winnings could be considered to have come from the shared joint income of both parties and would have been used for joint purposes; therefore, the lottery winnings could be treated as a joint contribution.
But a case last year regarding the division of lottery winnings that went through the Full Court of the Family Court has surprised legal experts. The wife of a lottery winner was denied the right to get half of her husband's winnings after they separated. According to Slater & Gordon:
In [the Elford &Elford (2016) case], the Court dismissed the wife’s appeal that she was entitled to a greater share of the property pool, which consisted mainly of lottery winnings. The Court upheld the trial judge’s decision that the winnings were not a ‘joint endeavour’ but rather that the husband had made the sole contribution to the winnings.
That case was different because the husband and wife kept their individual financials separate even after they were married. The husband won over $620,000 in one of his weekly lottery ticket purchases and kept it all in his own bank account. The wife did not contribute to the purchase of the ticket nor did she have a hand in picking the winning numbers:
The Court found that the husband never intended the weekly purchase of a lottery ticket to be for a ‘joint matrimonial purpose’ and said that the husband did not ‘hand all his money to his wife; nor did she have the practical control of the family finances’.
The Court therefore concluded that it was appropriate to treat the husband’s lottery winnings as a contribution by him alone.
Slater & Gordon notes that the Elford & Elford case was unusual given how many couples pool their finances; the extreme financial separation involved in the case is a rarity. The couple didn't even have a separate joint bank account.
So if you do win the Powerball and have shared finances with your spouse, chances are you will have to share the winnings with them if you both go your separate ways.
You can read up on all the previous instalments of Is It Legal? here.