Hot tip: What happens to a gambling windfall if a relationship breaks down?
So you’ve had a big win on the Melbourne Cup! You picked the horse and placed the bet, so the cash is yours alone, right? Well…
If your marriage or de facto relationship is in-tact at the time of the bet, and if, at around the time of the bet, you (as a couple) both received and contributed income towards the ‘joint partnership’ of your relationship and dealt with your finances together, there’s a good chance that if a Family Law Court got involved later down the track (pun intended), it would find the bet was made using joint monies and the winnings would be treated and divided as the fruits of a joint endeavour.
However, there are no absolute certainties, and the Court has also found in some circumstances that winnings were not the product of a ‘joint endeavour’; rather they were a contribution made solely by one of the parties.
In a fairly recent case, the husband won the lottery less than a year into a nine year relationship, and placed the winnings in a term deposit in his sole name where they remained for several years.
The parties had maintained separate bank accounts before and after the win and did not have a joint bank account at any time during their relationship. The Court of Appeal agreed with the trial judge that the husband’s winnings should be treated as a contribution by the husband alone. In that case, the property pool consisted mainly of the lottery winnings. The property pool was divided 90% to the husband and 10% to the wife.
What if the big win is after separation? The Family Law Courts have the power to make orders, “with respect to the property of the parties to the marriage [or de facto relationship] or either of them” at the time the order is made, including assets acquired after the relationship has ended. It is entirely possible that the former spouse may be entitled to a portion of the winnings.
For more information contact or to discuss formalising your property settlement, contact our Private Clients team.
This article was written by Brendan Herbert, Principal Lawyer – Private Clients, Family Law.