How is property divided when a relationship ends?
In New Zealand, the Property (Relationships) Act 1976 governs the division of property when a couple separate. The starting point is that all relationship property is divided equally the partners (although, there are some key exceptions to this).
What is considered relationship property?
Relationship property includes the family home, household chattels such as furniture, and encompasses all property acquired during the relationship, subject to certain exceptions.
What about separate property?
Separate property is not divided equally and is generally retained by the spouse who owns it. Separate property includes assets that were owned prior to the relationship. It also includes gifts, inheritances and distributions from a trust, however, if these assets have become mixed in with other property, they may lose their status as separate property.
How are debts divided?
Whether or not a debt is shared does not necessarily depend on whose name the debt is in. Rather, it depends on what the funds were used for. Generally speaking, a debt will be the responsibility of both partners if the funds were used for the benefit of the family.
Can we agree on property division ourselves?
It is possible to reach an agreement with your spouse about how you want to divide your property, however, it is still prudent to receive legal advice before agreeing to anything.
There is also still a process to follow in order to formally record the terms of any agreement. A separation agreement will need to be signed and, in order to create a valid agreement, each partner must receive independent legal advice about what their legal entitlement is compared to the terms of the agreement.
Often, a partner may change their mind about an agreement once they receive advice about their entitlements. That is why it is important to obtain legal advice before agreeing to anything with your spouse.
What if we can’t agree?
If you can’t agree, you can engage a lawyer to negotiate on your behalf or you can seek the assistance of a mediator or go to Court.
It is important to remember that every situation is unique and it is recommended that you seek legal advice for specific guidance on your situation.