Winning the lottery – does it do more harm than good?

The excitement of winning the lottery can almost certainly be stained with the possibility of your former spouse being entitled to some, if not half.

A common misconception within the divorce process is that the financial aspect of the breakdown of the marriage is dealt with inclusively. Whilst they do go hand in hand, and you cannot apply for financial remedy without an ongoing divorce application – divorce and financial remedy proceedings are two completely separate applications. It is more beneficial for both parties to deal with the financial aspect of the breakdown of their marriage whilst the divorce is ongoing. Waiting until after the final order of divorce is received to deal with the finances is simply not good practice.

Recently at MSB Solicitors, we were instructed by the Wife within divorce and financial remedy proceedings. Following the breakdown of their marriage and separation, the Wife made the application for the divorce and the Husband made the subsequent application for financial remedy proceedings.

Following on from issuing the application for financial remedy proceedings, the Husband had received a lottery of win of approximately £116,000. Despite the couple being separated for a while, the Wife still had a beneficial interest in all assets held by the Husband, including the lump sum lottery win, in accordance with the law. This also works in relation to the Husband’s beneficial interest in the Wife’s assets. Unfortunately, in this case, the Wife did not hold any assets in her sole name.

Upon learning of the lottery win, as the Wife’s solicitors, we had to protect her beneficial interest. A signed undertaking, or a legal commitment to the Court, was requested from the Husband to not dissipate or reduce funds held in which our client may have been entitled to. The Husband held £50,000 in premium bonds, and so as long as they remained untouched, we felt satisfied that her beneficial interest was maintained. In addition to the lottery win, held on account by conveyancing solicitors, were the net proceeds from the sale of the former matrimonial home. They were to be held upon final financial settlement. If it was found that the Husband did dissipate assets or funds from the financial pot (i.e., the lottery win), the Court would be in a position to offset a larger portion of another asset, such as the net proceeds, to the Wife, in order to atone for the conduct of the other party.

The starting point in any financial remedy application is 50/50. However, a Court will also take into account the overriding factor of each party’s need. It is only then that a Court will consider a departure from equality. Needs can include those of any children of the family, and who predominantly has care of them.

In this case, the biggest question the Court had to consider was if the lottery winnings were a matrimonial asset or a non-matrimonial asset.

Matrimonial assets include any property or assets jointly owned by the parties, or otherwise accrued during the course of the marriage. On the other hand, non-matrimonial assets can be considered as that which is attained prior, or post-separation.

This is comparable to the case of S v AG (2011), wherein the Wife won £500,000 as part of a lottery syndicate, a separate entity from the Husband. The Court had determined that, given that the Wife’s own financial contribution led to the lottery win, it was not to be considered a matrimonial asset. However, it was also determined that, given part of the funds were used to purchase and renovate a property in which the Husband resided for a short period of time, the property was therefore considered a matrimonial asset. On this basis, the Husband was not entitled to an equal share, but he was awarded an £85,000 lump sum.

Therefore, it is advisable in any situation, whether you are currently in proceedings or thinking of issuing, that you obtain expert legal advice to be fully informed of all outcomes.
If you need advice or guidance in relation to divorce or finances, please do not hesitate to contact us. We have a team of specialist family divorce solicitors who can assist you on your journey in receiving your fair share or protecting your assets.
MSB Solicitors are a trusted and recommended law firm in Liverpool, Manchester, and Cheshire, offering a full range of award-winning services for businesses and individuals across the North West region.

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If you would like to discuss any of the above, please do not hesitate to get in touch with our team, via Mia Dodd,

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