Following a separation, it is important to consider how your assets and liabilities will be divided. Sometimes people are able to reach an agreement regarding the division of their assets without the need for mediation or a trial, however in some cases the matter ends up going all the way to Court to be decided.
In WA, the rules that govern the division of assets are outlined in the Family Law Act for married couples and the Family Court Act for de facto couples. When deciding what percentage of the asset pool each party is entitled to the Court will consider a number of things, including:
- financial contributions made during the relationship;
- non-financial contributions made to conserve or maintain the matrimonial property during the relationship;
- contributions towards childcare or homemaker responsibilities during the relationship;
- whether either parent will be obliged to pay child support pursuant to the Child Support (Assessment) Act; and
- the parties’ future needs (including factors such as their age and health, the income of each party and whether either party has care of a child or children).
These considerations are outlined in section 79(4) of the Family Law Act and section 205ZG of the Family Court Act. These Acts also stipulate that the Court will not alter property interests unless it is satisfied that it is just and equitable to do so.
Post-separation purchases:
The first step in determining how to divide the parties’ assets is to identify their property. The Court will ordinarily value the asset pool of the parties as at the date of the trial (see for example the cases of Williams v Williams and Hauff v Hauff).
This means that contributions made to the asset pool, (i.e. purchases, gifts or winnings) between separation and the trial may be considered part of the parties’ joint assets. Before deciding whether contributions made post separation but pre-trial will be part of the asset pool, the Court will need to consider whether it is fair to come to such a decision.
Lottery winnings:
So what would happen if you bought a winning lotto ticket after separating from your partner, but before the trial? You may be surprised to learn that this has in fact happened numerous times.
It was established by the case of Zyk v Zyk that the source of the funds used to purchase a lottery ticket are not a determining factor in deciding how the winnings of said ticket should be distributed. What is important, however, is the relationship between the parties at the time the ticket was purchased.
In the case of Eufrosin v Eufrosin the wife purchased a winning lotto ticket after separating from her husband but before the trial. The Court decided that because the marriage had dissolved at the time of purchasing the ticket, it was deemed to have been bought for her own individual purposes rather than as a joint endeavor. Nevertheless, the husband was awarded $500,000 (just under 15%) of the wife’s $3.4 million lotto win, based on his future needs.
In Farmer v Bramley the wife was awarded $750,000 (15%) of the $5 million winnings of a lotto ticket that the husband bought post separation. The wife’s entitlement to 15% was based largely on her contributions to the welfare of the family, her future needs and the disparity in the parties’ assets. A similar decision was made in Bradley v Weber, where the wife was given 20% of the winnings of a lotto ticket bought by her husband after they separated.
Conclusion:
The cases outlined above demonstrate the discretion the Court has in determining the percentage split of an asset pool after a separation. The division of assets, and in particular lottery winnings, will depend largely on the individual circumstances of each case.
Bearing in mind the ability of a former spouse or defacto partner to have claim on assets you acquire after separation, you should take steps to finalise your property division as soon as possible after separation.
If you would like advice on the division of your asset pool after a separation, or if you’ve won the lotto (lucky you!) and would like to know whether your former partner may have a legitimate entitlement to part of it, please do not hesitate to call Lynn & Brown Lawyers. Our expert team will be happy to assist.
About the authors:
Chelsea McNeill is in her third year of studying Law at Murdoch University. Robert Pearson was admitted as a barrister and solicitor of the Supreme Court of Western Australia in 2013 and is an experienced lawyer specialising in Family Law matters. Steven is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in commercial law, dispute resolution and estate planning.
