Lottery Winnings and Family Property

When separating or divorcing, married and common-law couples are required to participate in an equalization of net family property. However, certain assets will be excluded from consideration as family property, such as inheritances, as long as the inheritance was kept separate from shared finances and not used to say, purchase the matrimonial home.

One issue that has caused frequent disputes throughout Canada for couples during and after a breakdown of their relationship is lottery winnings. What happens if one spouse wins it big and the couple separates shortly afterward? What if a spouse wins after a separation but before a divorce? Are the rules the same for common law couples? Below, we will look at how lottery winnings have been treated by courts across Canada in different scenarios.

Former Spouse Sues for Half of Winnings

One Alberta woman who was long separated from her former spouse, found herself in court defending her right to keep her half of a big lottery win she shared with her current partner. Robin Walker had been separated from her spouse for approximately 8 years when her boyfriend won a $60 million Lotto Max jackpot. He shared the windfall with her, giving her $30 million dollars. Ms. Walker’s former spouse then appeared, bringing a motion requesting half of her share of the winnings, and seeking a preservation order for $7.5 million to be paid into a trust pending the outcome of the case. The court found that the couple was married in law only and noted Ms. Walker had voluntarily paid support to her former spouse since her win. As a result, Mr. Roth’s application was denied.

A Divorced Couple Still Living Together Required to Share Winnings

In Ontario, a couple who had been married for seven years before divorcing continued to share a home and live as spouses. As was their habit, the husband regularly purchased lottery tickets, which he would check when the winning numbers were announced on the news. The wife would then check the ticket again the following day at a store. With one such ticket, the husband checked the numbers and concluded the ticket hadn’t won. The next day, the wife checked it at the store and realized the ticket was a winner, of a $1 million prize.

The wife did not initially tell the husband about the win, and went to collect the funds on her own. She raised suspicions at the OLG offices when she was asked where the ticket was purchased and she couldn’t provide an answer. She ultimately said the ticket had been a gift. After collecting the money, she told the husband and gave him $300,000 of the $1 million dollar prize. The husband brought an action seeking another $200,000, representing an equal share of the winnings. He was ultimately successful, with the court finding that, despite their divorce, the couple had lived in a spouse-like relationship and acted as though they expected to share in any lottery winnings.

Use Cohabitation or Marriage Agreements to Clarify Property Division

While ultimately a court will apportion lottery winnings differently depending on the specific circumstances involved, people can take proactive action to ensure they have control over how any winnings will be divided during the course of their relationship. Through creating a cohabitation or marriage agreement, a couple can set out how they wish to treat any lottery windfall they may experience, in advance. Agreements can be customized to address a variety of potential situations. If one half of a couple regularly plays the lottery, they may wish to set out terms stating that any winnings will be the exclusive property of that spouse, and will be kept separate from the joint family property.

At Mincher Koeman, our lawyers have the experience and skill necessary to handle any matter involving the division of family property, no matter how complex. We provide knowledgeable and candid advice to our clients, working to efficiently traverse the process of valuing and dividing shared property. If you are facing the end of a relationship and require the services of an effective family law lawyer for the fair division of your family property, contact our office to make an appointment to discuss your matter by calling us at 403-910-3000 or by contacting us online.