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16 Feb 2014

Separating couples should be aware that their financial circumstances can change dramatically from the date of separation to the final split of the matrimonial/relationship property.  Recently, a woman who won $6 million had to postpone celebrating her good fortune, due to her winnings being included for consideration in the final property pool split – even though she won the money after the date of separation.

 

Background

 Mr and Mrs Eufrosin had been married for 20 years.  The wife had been consistently gambling since 1982, some 11 years prior to the marriage.  The parties had been separated for 6 months prior to Mrs Eufrosin’s big win.

Mrs Eufrosin had gambled regularly throughout the marriage.  After separation Mrs Eufrosin continued to purchase lottery tickets, with financial assistance from her sister.  Her sister contributed $20-50 per week to the tickets and contributed funds toward the winning ticket.

 

The Court’s Decision

 As the parties were separated at the time of Mrs Eufrosin’s win, she argued that the winnings were not ‘property’ within section 79 of the Family Law Act because Mr Eufrosin had not contributed to the purchase of the ticket.

Mr Eufrosin argued that the ticket was purchased from joint matrimonial funds that he therefore had contributed to the purchase of the ticket and that the ticket was therefore the property of both parties.  Mr Eufrosin’s argument was ultimately unsuccessful.  The Family Court separated the assets into two distinct pools – the first was comprised of the matrimonial assets up to the date of separation, the second was comprised solely of the lottery winnings (and assets purchased by Mrs Eufrosin with the winnings).  The Court said that Mr Eufrosin was not entitled to any money from the second pool.

While Mrs Eufrosin kept her winnings and all assets she purchased with same, the Court awarded Mr Eufrosin an additional $500,000 from the first pool, being assets accumulated over the course of the marriage.  The reason for this decision was twofold:  firstly, the parties’ respective financial positions would have been drastically different, and unfairly so, if Mr Eufrosin did not receive a greater proportion of the matrimonial property pool, and secondly Mr Eufrosin was 62 years of age and had a limited number of working years remaining.

The odds of winning a very large amount in the lottery are approximately one in 27 million – therefore, dividing up large winnings is a problem most of us will not have to deal with upon separation.  Similar issues would be raised however, if a party received a windfall of any kind after separation, including casino or other gambling related winnings or an inheritance.

This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office at reception@hhg.com.au or call us on 1800 609 945.

*This is general information only, and does not constitute specific legal advice. Please consult one of our experienced Legal Team for specific advice relevant to your situation.

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