After a separation, dividing relationship property in NZ can be overwhelming. We can guide you through the legal intricacies and reduce your emotional burden at a challenging time.
Navigating the Property (Relationships) Act
Every separation and division of relationship property in NZ is different, but each comes under the Property (Relationships) Act 1976. The general presumption is that relationship property in NZ will be equally divided.
When we meet with a new client to discuss relationship property in NZ, we carefully listen to their circumstances and wishes. In working out a strategy for how best to move forward, several factors may be relevant, such as:
- Resolving de facto relationship property
- Determining how to split property in a divorce
- If the relationship has been for less than three years
- Explaining or helping to understand how long after a separation you can claim property in NZ
- What happens when a family house is only in a partner’s name and not in joint names
- Negotiating details of a divorce settlement agreement
Whatever your circumstances are, we will work out a strategy for your division of relationship property.
What are the steps to divide relationship property in NZ?
New Zealand’s Property (Relationships) Act 1976 applies if you’re married, in a civil union or de facto relationship. It defines what is relationship property in NZ.
If you’ve decided to separate or have already separated, there are a few key steps to follow to work out what is considered relationship property. Under the Property (Relationships) Act, relationship property in NZ is always divided, but separately owned property is not.
Step 1 – Identify whether the property is relationship property or separate property
If you don’t have a relationship property agreement, start by making a list of all the property you purchased during your relationship. Some property is automatically relationship property, e.g. the family home or family chattels even if purchased before the relationship. This could include:
- The family home
- A KiwiSaver scheme
- Other bank accounts
- A business
- Superannuation and life insurance policies
- Cars, boats, farm machinery and other vehicles
- Household items such as furniture and whitegoods
Separate property could include:
- Property acquired by one person before the relationship started, such as a house that has been used as a separate rental
- An inheritance or gift received by one person
- Property received under a trust
In certain circumstances, separate property can be considered relationship property in NZ, particularly where the property is used by both people during the relationship. This is why advice from experienced relationship property lawyers is important, to help you understand the difference between relationship and separate property in your own specific situation.
Step 2 – Work out the value of the relationship property
As best you can, give a monetary value for each item of relationship property. You may need to get market appraisals done for more expensive items such as your family home. For items such as household furniture, the monetary value would be its second-hand market value, rather than its original purchase price.
Step 3 – Identify whether debts are relationship debts or personal debts
Under the Property (Relationships) Act, relationship debts are joint debts, or debts that can be considered beneficial to the relationship. Examples of relationship debts include:
- A mortgage over the family home
- Personal loans taken out to purchase a car used for the family or to renovate the family home
- Credit card debts, where the card is used to buy items for the family, such as groceries, petrol or a family holiday
- School fees for children of the relationship
Step 4 – Identify any other relationship property issues
If you are uncertain if you have identified all the relationship property and debts, Shine Lawyers New Zealand can help. You may also be uncertain about matters specific to your own situation, such as whether de facto relationship property is divided equally, or perhaps your family house is only in your husband’s name.
There may be certain circumstances in which relationship property in NZ is not divided equally. These could include:
- If the relationship was short (less than three years)
- If you have ‘contracted out’ of the Property (Relationships) Act 1976, such as through a relationship property agreement
- An unequal division of property is ordered
An unequal division of property may be ordered to avoid economic disparity at the end of a relationship, if one person’s income is significantly higher than the other person’s. The disparity may have existed through the relationship because, for example one person:
- Stayed at home to raise children while the other person continued working
- Continued working to enable the other person to study and gain educational qualifications
Step 5 – Formally contact your former partner (or their lawyer)
It’s time to start a process of negotiation to formally divide relationship property in NZ once:
- You have received legal advice
- Relationship property and debts are identified and valued
- Any specific relationship issues have been identified and addressed
There are two ways to take this next step. Your own situation may be one where you are comfortable contacting your former partner to directly discuss division of relationship property with them. Alternatively, your relationship property lawyer can contact your former partner or their lawyer.
The benefits of working towards a division of relationship property directly with your partner include:
- Your legal fees will be reduced
- It can be a quicker way to reach agreement
But for this to occur, it’s important that you can both amicably meet to discuss the division of your property and compromise, to formally settle the division. If not, an experienced relationship property lawyer can guide you through this key step.
Once division of relationship property in NZ is agreed
Once agreement is reached, it’s recorded in a separation and relationship property agreement. It’s important that each party to the agreement (you and your ex-partner) receives separate legal advice before signing.
What happens if you can’t agree on division of relationship property in NZ
If you and your ex-partner can’t agree on how to divide relationship property in NZ, you may end up going to court. This means that the Family Court will decide on the division of your relationship property in NZ.
One benefit of going to court is that you can be certain of an outcome. But the disadvantage is that this route is more expensive (in legal fees) and most likely much longer.
Our team at Shine Lawyers New Zealand are experts in both negotiation and litigation of relationship property in NZ. We are experienced in the provisions and requirements of the Property (Relationships) Act 1976, and we will work hard to secure the outcome you need to move forward.
Case study – separation after a 7-year relationship
Our client Jasmine* separated from her partner Mike after 7 years together. They have two young children. Their relationship property includes:
- The family home, agreed value of $1 million (less a $500,000 mortgage)
- Their KiwiSaver schemes
- Two cars
- Family chattels
We helped Jasmine negotiate a settlement with Mike that they were both happy with. Mike wanted to keep the family home and continue living there. On settlement, Mike paid Jasmine $275,000 and they amicably divided the family chattels. The $275,000 incorporated:
- The half-share of the family home ($500,000 equity)
- Financial adjustment because Mike’s KiwiSaver and car were worth more than Jasmine’s
*Names have been changed to protect privacy
Separating? Shine Lawyers can help
If you’re thinking of separating or have separated, please contact us to discuss how we can help. The relationship property team at Shine Lawyers New Zealand has a deep experience in representing clients going through a separation. We aim to achieve the best possible results for our clients and help secure the outcome needed to move forward.
Contact us to talk over the phone or make an appointment to come and see us.
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