Winners and losers – who gets a lottery win on divorce?
November 2011
As more and more people take part in lotteries and prize draws so it is inevitable that many of those who win will either be, or become, involved in a divorce – hopefully not as a result of their win!
Although it has no legal basis, the generally held belief is that if you are married then, when your numbers come up, your spouse is entitled to half of the winnings. But is this necessarily the case and would it continue to be so if you were to split up either before or after your win?
Not always is the simple answer.
The High Court held that where one party to a marriage wins the lottery the other will not share in those winnings unless they were acting together in the ticket’s purchase (in other words they were effectively acting as a syndicate) or unless the proceeds are invested in joint assets or property such as the matrimonial home.
This landmark ruling, thought to be the first in the UK on lottery winnings, centred around a hotel porter who claimed a proportion of his former wife’s lottery winnings.
The couple had been living in a Council house, when his wife won the money without her husband’s knowledge more than 10 years ago. The Judge found that the wife had been playing the National Lottery, without her husband’s knowledge, from her own earned income and thus the starting point was that the lottery prize of £500,000 was ‘non-matrimonial money’. However, the wife then used some of the money to purchase what became the new family home. In doing so, she therefore converted that part of her non-matrimonial asset into matrimonial property.
As a result of this the Judge decided that this element of the winnings comprised matrimonial property and awarded the husband a lump sum which reflected the short period of time in whic he had lived in the property but still more than he would have received had his wife kept the money in the form of cash.
This is an interesting decision – another one that ‘ring fences’ assets after each party’s needs have been met, rather than applying the so called sharing principal to all property, rather than just joint matrimonial property. Moreover, this decision is the latest in a line of cases that demonstrate now how some judges in the High Court appear to be separating assets of married couples akin to the approach adopted in Europe – is the long term aim to make pre-marriage agreements easier to regulate?
There is some concern that what the decision does is to widen the range of assets that the courts are willing to regard as non-matrimonial property which it is felt may in turn lead to couples protecting their assets when they could better be used for the benefit of the family as a whole.
One thing which is certain is that this is unlikely to be the end of the matter and that there will inevitable be other cases which test the rule in the future – perhaps ones where the use of the funds is less clear cut than in this case.
If you are currently experiencing matrimonial or family related probelms then you should make sure the financial aspect of your marriage are understood and in order.
Richard Nelson LLP can assist you with all aspects of divorce and putting in place appropriate agreements for dealing with the financial aspects of living together and splitting up.
For more information contact Michelle Brammer either by email on michellebrammer@richardnelsonllp.co.uk or by phoning us on 0115 986 3636.