Relationship Property

lawyer discussing relationship property agreement with coupleWhether you are married or  “just living together” you don’t want to think  about death or separation. But such events can cause financial hardship and stress.

If you are in a relationship or about to live together you can complete an agreement which will achieve certainty and peace of mind should you separate. No two people are the same so no two relationships are the same. We can help you draft an agreement that suits your personal circumstances and works for both parties.

If you have separated without an agreement then we will help you understand your rights as contained in the Relationship Property Act 1976 and its extended reforms.

Talk with us to help make things easier for your relationships. We will discuss what options will work for you. This may include making your Will and other arrangements for your future.

Contact us with any questions or complete the legal toolbox form.

Go to Legal Toolbox Form

In New Zealand, the law relating to relationships is governed by the Property (Relationships) Act 1976. You may already have a formal agreement in place with your partner, but if you don’t and are either married or in a de-facto relationship, you have rights and obligations under the Act.

You may have heard of, or experienced in the past, injustices or unfairness in this area of law but the Property (Relationships) Act 1976 has undergone extended reforms and has evolved in its interpretation and application. Core principles and purposes underpin this legislation such as –

  • Relationships are viewed as a partnership of equals in both benefit and contribution
  • There are a diverse range of ways parties can contribute to the relationship – both financially and non-financially
  • The Act aims for a just division between the parties in the specific circumstances of the parties
  • The interests of any children of the relationship are taken into account

What constitutes a relationship under the Act?

If you are married, in a civil union or have been in a de-facto relationship for at least 3 years, the Property (Relationships) Act applies.

The Act may also apply to de-facto relationships of less than 3 years if there is a child of the relationship or a serious injustice would occur if a court order is not made under the Act.

Living together as a couple is a sign that you are in a de-facto relationship however, more holistically, it is the interconnection in your lives of the home, finances, children and presenting yourselves as a couple to your family and friends that paint the picture of you both living as a de-facto couple.

What is relationship property?

The Act distinguishes between “relationship property” belonging to both of you and “separate property” being the property of just one of you. Aside from exceptional circumstances, all relationship property is divided equally in the event of separation. Note, “property” refers to all belongings and assets, not merely real estate.

The family home and chattels are generally considered relationship property, regardless of whose name they are in or who paid for them. Behind this is the idea that both parties in the relationship enjoy a common association with the property. The large pool of assets that constitute relationship property include the following:

  • Property attained during your relationship;
  • Property owned by either of you before the relationship began but used for the benefit of both you during your relationship;
  • Superannuation funds accumulated during your relationship;
  • Inheritances and gifts mixed with other relationship property e.g. an inheritance used to purchase a family car or to pay off a mortgage on the family home.

In contrast to relationship property, separate property remains the property of the person who owns it. More narrowly, this includes:

  • Property acquired by one party prior to the relationship and not used for the benefit of both of you (kept separate);
  • Inheritances and gifts that remain separate e.g. in a separate investment account or a family trust.

What happens to the property if my partner/spouse or I die?

The survivor of you will have the option of either dividing the property per the deceased partner’s Will (if they have one) or apply for the property to be divided under the Property (Relationships) Act 1976. Your lawyer will be able to take you through the implications of each option for you.

I have separated from my partner and we can’t agree on how we will divide our assets. How can I ensure I get my fair share?

Although all relationship property is to be equally shared, it can be difficult to work out if an arrangement is fair, especially when separate property has been shared and mingled. Your lawyer will be able to help you determine which assets may be considered relationship or separate property. They will also be able to assist you in drawing up a binding Agreement for both of you to sign determining how the assets will be divided.

The Act sets out firm rules to ensure that an Agreement will be binding and can be relied upon. If one of you wishes to buy the other out of the family home the bank will require an Agreement be completed with your lawyer first.

I am currently in a relationship and would like to ensure my assets are protected in the case of a break-up, but don’t necessarily want to follow equal division under the Act. What can I do?

Preparing for a break-up in this manner can be a good idea as such preparation can prevent costly legal and court fees later if you separate and cannot agree on division. The rules under the Act are the “default rules” so if you want to make an alternative arrangement, you can enter into a “Contracting Out Agreement” which is commonly referred to as a “pre-nuptial agreement”. This Agreement can be made with your partner at any stage in your relationship provided certain requirements are met to ensure a binding Agreement that can be relied upon.

If you have any questions regarding the legal status of property in your relationship, the team at Innes Dean Tararua Law can assist you today.

Go to Legal Toolbox Form