Win some, lose some: Lottery Winnings as Relationship Property

Monday 14 April, 2025

The chances of winning the lottery may be few and far between. Despite the odds, disputes over lottery winnings have come before the Court. The glory of striking it rich has been crushed for litigants when they have discovered that their prosperous prize was not all theirs to keep, but rather to be shared with their ex-partner. 

The law 

The Property (Relationships) Act 1976 (Act) sets out two classifications of property, relationship property and separate property. Upon separation, relationship property is presumed to be split equally between each partner or spouse. Aside from the exceptions in the Act, any property that is acquired by a spouse or partner after a marriage or de facto relationship has begun is relationship property. Case law has determined that lottery winnings are in fact relationship property. 

In CGWS v ADS, the husband had won $23,960 from a lucky Lotto ticket one month before the party’s separation. On separation the husband held the funds in his personal bank account. 

The Court concluded that the Lotto winnings were relationship property simply because the funds were property that was acquired by the parties after they were married. It was ordered that the winnings be divided between them following their separation. 

In Rabson v Gallagher, Mr Rabson had been successful in hitting the jackpot. He however wasn’t so successful in rebutting the argument that the Lotto winnings were relationship property.  

Mr Rabson purchased a winning lotto ticket during his relationship with Ms Gallagher. When he discovered his luck, he collected the winnings and deposited them into his personal bank account. The funds were later transferred into a trust bank account and used to purchase properties.

Mr Rabson unsuccessfully argued that the Lotto winnings were trust property. The Court found that during their relationship, Mr Rabson and Ms Gallagher purchased Lotto tickets weekly, sometimes jointly and sometimes separately using their own cash. Although the winning ticket was bought by Mr Rabson personally, it was held that the ticket was purchased for both the parties and owned jointly from the time of purchase. The prize money was therefore declared relationship property. 

Summary 

The Court has made it clear that lottery winnings will form part of the relationship property pool as soon as they are won, meaning these respondents were made to share their prize with their ex-partner. 

Winnings will only remain separate if they are acquired before the relationship and kept separate, or if a contracting out agreement is signed. A contracting out agreement is the best way to protect any prized possessions. If you have any significant assets you would like to keep separate from your relationship, we recommend you think about a contracting out agreement. 

If you would like advice on whether you need a contracting out agreement, please contact one of our family law specialists.