For those going through a separation or divorce, a key question arises: is a lottery win considered a matrimonial asset to be divided, or is it non-matrimonial property?
Lottery Wins and Divorce: A Key Case Study
The case of S v AG provides insight into how lottery winnings can be treated during divorce proceedings.
- The couple married in Colombia in 1984 and moved to England with their two children in 1991.
- The wife won £500,000 through a lottery syndicate on December 31, 1999. She used the majority of the winnings to purchase and renovate a property that became the family home.
- The parties officially separated in 2003, and subsequent divorce and financial proceedings occurred in both Colombia and England.
The primary issue before the judge, Mostyn J, was whether the lottery win should be classified as matrimonial or non-matrimonial property and how it should be divided.
Key Findings
- Separation Timing: The court determined that the couple separated in 2003, rejecting the wife’s claim that they had separated in 1996.
- Ownership of the Winnings: The judge dismissed the wife’s assertion that the lottery winnings belonged to a friend who had lent her the money.
- Classification of the Winnings: The judge assessed the nature of the lottery winnings:
- Non-Matrimonial Property: The wife had purchased the lottery ticket independently, using her own income and without the husband’s knowledge. As such, the winnings were initially deemed non-matrimonial.
- Conversion to Matrimonial Property: When the wife invested the winnings into a family home, she transformed part of the non-matrimonial asset into matrimonial property.
- Division of Assets: Given the short period the husband lived in the family home and the non-matrimonial origin of the funds, the court ruled that equal division was not justified. Instead, the husband was awarded a lump sum of £85,000 (approximately 15-20% of the home’s value) to meet his financial needs.
General Principles
The treatment of lottery winnings in divorce depends on specific circumstances:
- If both spouses were part of a lottery syndicate or jointly purchased the ticket, the winnings are considered joint property and subject to equal division.
- If the ticket was purchased by one spouse independently, using their own funds, the winnings are generally classified as non-matrimonial.
Need Expert Advice?
If you are divorcing or have unresolved financial matters post-divorce, contact us for a consultation with one of our family law experts. We can help you understand your rights and options to secure a fair settlement.