Does a lottery win get shared in a divorce?

The thrill of a lottery win can be quickly tarnished when divorce is involved and there is the prospect of having to share it with a previous partner. If there is a large win, the resulting financial settlement will likely comprise an ultra high net worth one. Does a lottery win automatically get shared as part of a financial settlement? Can you wait until the divorce is finalised before cashing in to avoid having to share with someone you no longer want to be with? The answer is it depends on the circumstances of the win. 

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Cashing in on the lottery prior to divorce 

On divorce, all assets owned by the parties must be disclosed and considered - this includes lottery winnings, even if won by the endeavours of only one of the parties. The courts, albeit with much discretion, will divide matrimonial property equally, in the name of fairness. Where necessary, however, the judges can resort to dividing non-matrimonial property, where this is necessary to meet the parties’ needs.  

Matrimonial property typically includes any property jointly owned by the parties, or otherwise generated or accrued during the course of the marriage. On the other hand, non-matrimonial property constitutes that which is attained prior, or post separation. This often includes inherited assets or gifts. 

However, the 2011 case of S v AG held that even lottery winnings received by one of the parties during the course of a wedding may be considered non-matrimonial. In this case the wife bought the ticket via her own earnings (without their partner’s knowledge), and then kept the winnings a secret. It was stated that where the winnings were not used as part of marital life that the winnings could be kept separate and not become part of the marital pot.  

However, this does not mean that winnings that have been obtained by one spouse without the other knowing can never become matrimonial property. In the case of the S v AG, the wife actually used the winnings to buy a house in which both herself and her spouse resided prior to the divorce. The effect of this is that part of these winnings became marital wealth. As such, the courts found that the money tied up within the house did fall within the sharing principle. 

It is important to note the wide discretion of the courts in respect of financial proceedings, especially when it comes to making needs assessments in relation to the parties. Therefore, it is vital that you obtain legal advice as to your options, whether you are the winning party or otherwise. Should you win the lottery during your marriage, you may wish to consider a post-nuptial agreement that would helpfully dictate how to divide the winnings and any resulting assets in the future. This would guarantee a level of protection and certainty that you would not otherwise achieve (again subject to an assessment of needs), irrespective of whether you decide to ring-fence the winnings by keeping them in your own bank account. 

Cashing in on the lottery following a divorce  

Following the above reasoning, lottery winnings obtained prior, or subsequent to, the marriage would not be considered matrimonial. However, this does not necessarily guarantee they are always exempt from consideration. It was held in Waggott v Waggott in relation to maintenance orders and clean break provisions that the sharing principle stops “at or within a short time of the end of the relationship”.  

However, this does not automatically save you from having to allocate some of your winnings to an ex-spouse who may still make a claim following a divorce. This is the case where an ongoing maintenance agreement exists, the presence of which entitles an ex-spouse to make a claim should the party making the maintenance payments acquire newfound wealth. Such was the outcome in the case of Nigel Page, where the husband was required to make a £2 million payout to his wife, who made a claim ten years following their divorce, due to the husband’s £56 million lottery win.  It is understood that the divorce settlement in Mr Page’s case did not include a clean break clause, the presence of which would have removed the option of his ex-spouse making a claim. It is therefore advisable in any situation where there is a large change in a party’s financial situation (be that via a lottery win or inheritance) that they take expert legal advice on the best way to ensure it remains protected in the future. 

Vardags has an experienced team of divorce lawyers to help you, whether you are trying to protect your wealth or get your fair share.