Dividing assets during a relationship break up the smart way using a relationship property lawyer
Don’t leave who gets what during a relationship break up to chance, with the help of a relationship property lawyer you can avoid a lengthy and expensive legal battle.
What is relationship property, and what do you do with it if you separate from your spouse or partner? What do you do if you are entering a relationship and you want to keep something you own as your own separate property?
The Property (Relationships) Act 1976 (“The Act”) provides the answers to these questions. We are able to help you navigate this legislation and make sure that you are informed of your rights and properly advised on what steps you need to take.
A ‘qualifying relationship’ in terms of the Act in New Zealand includes a marriage, civil union or de facto relationship. There are many factors that are considered when determining whether a relationship is ‘de facto’. The basic consideration is whether or not you have been living together in a relationship for three years’ or more. Whether or not two people live together as a couple will depend on various factors including the length of relationship, nature and extent of common residence, the degree of dependence between each other, and more.
‘Relationship property’ includes the family home, and all family chattels (furniture, appliances, vehicles, boats, household tools, and even pets), superannuation, savings and any other property acquired during your relationship. The family home and family chattels will be relationship property regardless of when they were purchased.
But you both brought separate property into the relationship and want to keep it, not split it up.
Contracting Out Agreement
When you separate, the general principle is that relationship property is split 50/50. The Act enables people in a relationship to ‘contract out’ of that equal sharing principle. This can be done by entering into what is called a Contracting Out Agreement (also known as a Section 21 Agreement). You and your partner are able to agree what you would like to keep as your own separate property in the event of your relationship not working out. We appreciate that it can be tricky to talk about ‘what if it all goes wrong?’ The reality is that sometimes relationships do come to an end and it can often come as a shock to someone when they find out their former partner has an equal interest to their assets.
Entering into a Contracting Out Agreement is ultimately a personal decision between you and your partner. We are able to talk with you regarding your options and can assist you in drawing up an Agreement which identifies what is yours and what is your partner’s separate property from now and moving forward into the future of your relationship. A Contracting Out Agreement can be reviewed or terminate after a period of time if you agree.
So you have assets to be divided up, how do you ensure a fair division of property?
Separation Agreement
The Act also provides for people to record how their property is divided at separation. The Act presumes that each partner contributes equally to their relationship, even though that contribution may be done so in different ways. If your relationship does not work out and you have been in a qualifying relationship, each person is entitled to a half share of relationship property. There are some exceptions to this rule which require proof that an equal division of property would be ‘repugnant to justice’.
Our job is to assist you in reaching an agreement as to how to divide your property. Once an agreement is reached, each party and their lawyer will sign a Separation Agreement recording what has been agreed. If there are properties involved in the division of relationship property, the bank will require a separation agreement to execute a refinance of the mortgage.
If you can’t agree between you on how to divide relationship property, you can apply to the Family Court for a division of relationship property under the provisions of the Act.
What next?
Relationship Property Agreements must be made according to strict requirements, including each party receiving independent legal advice. If you find yourself entering a new relationship or separating from your partner or spouse, we would encourage you to seek legal advice. We are able to assist in providing advice around relationship property including; drafting agreements, providing independent legal advice and making applications and representing you in the Family Court.
At Legal Solutions we like to offer our clients pragmatic and clear advice. We understand when you are in a position of needing an agreement, life can be tough going. So call us today for expert legal advice.