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Are lottery winnings matrimonial assets?

Are lottery winnings matrimonial assets?

Source: TODAY
Article Date: 20 Nov 2019
Author: Sharanjit Kaur

Court rulings show that the person who buys the lottery ticket does not necessarily have sole claim on the winnings, the author notes.

When someone wins the lottery, does that money belong only to the person? Or does his or her spouse have a claim to it?

This question came before Singapore’s highest court earlier this year when a woman took her ex-husband to court over prize money of S$1.25 million from a 4-D ticket he bought in 2002.

The verdict? It depends on the intention when the ticket was purchased, the Court of Appeal ruled in the first such case to go before the courts here.

The couple in the case had been married for 23 years and have two grown-up children. After the divorce, the issue of whether lottery winnings are considered matrimonial assets to be split between both parties arose.

The Women’s Charter in Singapore says that if one spouse acquires an asset by way of a “gift” or “inheritance”, then that asset is the spouse's to keep entirely as long as the asset is not a matrimonial home and has not been substantially improved during the marriage by either or both parties.

The High Court had earlier ruled that the wife had no share in the winnings from the lottery ticket. However, her lawyers appealed, arguing that the “fortuitous nature” of lottery winnings meant they should be attributed equally to both parties and not solely to the husband.

The Court of Appeal found that lottery winnings can be considered matrimonial assets.

This is because, while a lottery win is perceived as a windfall, the winning ticket had to be purchased. This distinguishes it from other windfalls such as a “gift” or “inheritance”, which the Women’s Charter excludes as being matrimonial assets.

The Court of Appeal also ruled that this lottery win amounted to matrimonial assets to be shared equally since the winning ticket was bought with the intention of benefiting the whole family and not just the husband alone.

The court quoted Professor Leong Wai Kum, the leading scholar on family law in Singapore, from her book Elements of Family Law in Singapore: “If marriage is truly an equal co-operative partnership of different efforts for the spouses’ mutual benefit, why should they not share their good fortune?”

If the intention when the lottery ticket was purchased was that the entire family would stand to gain, then the husband “should not be regarded as being the sole contributor of the lottery winnings to the pool of matrimonial assets” unless he can prove that the ticket was bought with a view to only benefit himself.

In this case, the man had deposited his winnings of S$1.25 million from the 4-D ticket into a joint account with his then-wife. The account was then used to pay the mortgage on the matrimonial home.

This was a “strong (albeit not conclusive) indication that he had purchased the winning lottery ticket with the intention of benefitting the family instead of merely himself alone”, the court noted, in awarding the woman half of the S$1.25 million.

Two other sums of money — also lottery winnings — were not included as part of the matrimonial assets.

Between the couple’s separation in 2004 and the interim judgment of divorce in 2014, the man had won a total sum of over S$1.28 million in lottery winnings between 2011 and 2013, while the wife had won S$10,000 in 2010.

The Court of Appeal noted that these winnings should not be included in the matrimonial assets as they were purchased long after their separation.

Both the courts in the United Kingdom and Australia shared similar views on whether lottery winnings are matrimonial assets.

In a 2011 case in the UK, a wife won £500,000 in a lottery and the majority of it was used to buy and renovate the family home.

The court ruled that the prize money was a non-matrimonial asset as the wife had used her own income to buy the ticket and her husband was unaware she had done so.

However, when she used her winnings for the family home, the lottery winnings were converted into matrimonial assets, the court ruled in awarding her husband a share of the money.

An Australian court took a similar position.

In 1995, a husband won A$95,000 in lottery winnings two years after marriage.

In the Full Court of the Family Court of Australia’s decision, the lottery winnings were treated as a joint contribution of both husband and wife as the husband had a “general practice” of passing all of his money to his wife, who controlled the family’s finances.

However, in a later case in 2016, the Full Court ruled that there may be cases where lottery winnings are not considered joint contributions.

In this 2016 case, the parties had mainly kept their finances separate and did not own a joint bank account. The husband’s lottery winnings were deposited into a term deposit under only his name.

It is clear from the above cases that whether lottery winnings constitute matrimonial assets depends on the facts of each case and thus differs from case to case. Overall, these cases emphasise that the person who buys the lottery ticket does not necessarily have sole claim on the winnings.

Facts, such as who paid for the ticket, any intention of splitting lottery winnings, as well as whether the winnings were deposited into a joint account or used to pay for matrimonial assets, are all factors in determining the true winners of the lottery.

ABOUT THE AUTHOR:

Sharanjit Kaur is Partner and family law specialist at Withers KhattarWong.

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