Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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A Nova Scotia judge recently ruled that a lottery prize was not assumed to be mutual asset to be divided upon the breakdown of a common-law relationship.

The National Post recently reported on a man and a woman who had been living together for a number of years and had won $50,000 on a scratch-and-win ticket. The ticket had been purchased by the man. Notwithstanding the fact that the couple had previously shared winnings, the winnings were deposited into a joint account, and part of the winnings were used for a down payment on a property that they both owned, the court found that there was no prior agreement to share the winnings.

(In another recent Ontario case, the judge found that in absence of cogent evidence of a clear intent to share winnings, there will be no requirement to share.)

Had the couple been married, there would have been a presumption that the lottery winnings were joint.

In Ontario, s. 14 of the Family Law Act creates a presumption that in the case of married spouses, the fact that property is held in the names of spouses as joint tenants is proof, in the absence of evidence to the contrary, that the spouses intended to own the property as joint tenants, and money on deposit in the name of both spouses shall be deemed to be in the name of the spouses as joint tenants. The provision does not apply to common-law spouses.

What are the possible lessons from this?

1. If you are buying lottery tickets with someone else, be they a friend or unmarried spouse, have some agreement in place to share the winnings.
2. As Beyonce says, if you liked it, then you should have put a ring on it.

Thank you for reading.

Paul E. Trudelle - Click here for more information on Paul Trudelle.

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Two certainties and a long-shot.

The Toronto Star reported on January 4, 2009 that on the day Donald Peters died, he unknowingly provided financial security for his wife of 59 years, and for their family.

Peters bought two Connecticut Lottery tickets on November 1, 2008. He died of a heart attack later that day. His wife, in her grief, didn’t check the tickets until some time later. In fact, she states that she almost threw them out before checking them. On January 2, 2009, she collected the winning prize of $10,000,000 (U.S.).

Considering this matter from an estate administration angle, a number of potential questions or issues arise.

For example, in Ontario, would Estate Administration Tax (“E.A.T.”) be payable on the winnings under the Estates Administration Tax Act? E.A.T. on $10,000,000 would be approximately $150,000.

E.A.T. under the Act is payable based on the “value of the estate”, the stripped-down definition of which is the value of all the property that belonged to the deceased at the time of his or her death. Presuming the lottery took place after death, the value of the ticket at the date of death would likely be its face value or purchase price. Until the lottery takes place, a $1 ticket is, in most cases, only worth $1. (Believe me, I’ve tried to sell them for more, but my family wouldn’t pay my asking price, no matter how lucky I told them the ticket was.)

However, if the draw was pre-death, but the ticket wasn’t checked until post-death, then one would presume that the winnings would need to be included as property belonging to the deceased at the time of death, and E.A.T. would be payable on the winnings.

Good luck and good health,

Paul Trudelle