Lottery winnings and property settlements

Sarah and John have been married for six years and separated four weeks ago. John has moved out of the house, but continues to pay the mortgage and rates. Sarah has remained living in the house. On Christmas morning, John opens Facebook and sees Sarah tagged in a photo holding a lotto ticket with a caption that reads "What a win! Can finally take my dream luxury holiday in Europe! Thanks Santa."

Can John prevent Sarah from spending all of her winnings?

John may needs to commence urgent property proceedings in the Federal Circuit Court or Family Court and seek an injunction to prevent Sarah from accessing and spending the winnings, until such time as they can negotiate a property settlement, or final orders are made, either by agreement or as ordered by the Court.

Is John entitled to some of Sarah's winnings?

The pathway set out in Section 79 of the Family Law Act 1975 determines the overall adjustment of property interests Sarah and John will be entitled to. The first question in determining whether John is entitled to any of Sarah's winnings is whether or not the winnings would be included in the pool of assets and liabilities between John and Sarah. In this case, it is likely that the Court would consider the lottery win to be included in the pool as it came into Sarah's hands very recently after separation and there was still an intermingling of assets, with John continuing to pay the mortgage and Sarah living in the home.

If the lottery win was included in the pool, John and Sarah's entitlement to it, or a portion of it, will depend upon a number of factors including:

1. Their financial and non-financial contributions to the acquisition of property prior to and during their marriage;
2. Each of their future needs (including their age, health and income earning capacities);

3. Whether either John or Sarah will have full-time care of any children of their marriage; and

4. A number of other matters relating to their future circumstances.

Does Sarah have to tell John about these winnings?

Sarah does need to disclose her lottery win to John. When negotiating a property settlement, each party is required to provide full and frank financial disclosure of their financial circumstances to the other.

What claim does my former spouse or de facto partner have on my future assets?

Formalising a property settlement servers your financial ties and will prevent your former spouse from seeking an adjustment of property interests between you. If you have not entered into a formal property settlement, your former spouse may have a claim on your assets.

For advice about your options and entitlements, please contact us to make an appointment.