It is a common question to ask when you go to see a lawyer after a separation from your spouse or partner; “Can I keep gifts or inheritance that I have received during my relationship or do they have to be divided?”

When you separate from your spouse or partner (provided you have been together for 3 years or more), it is almost certain that over the period of your relationship you have received gifts from them and/or from others. It is also a possibility that you may have received an inheritance from a deceased relative during the relationship.

In terms of identifying whether this property is “separate” or “relationship” property, the starting point is the Property (Relationships) Act.

Property that is acquired during the relationship from a third person under a Will (an ‘inheritance’), by gift (e.g. birthday and Christmas presents) or by receiving a benefit under a Trust settled by a third party (e.g. yours or your spouse/partner’s parent’s Family Trust may sell property and provide it to you or your spouse/partner) is separate property.

If this property is managed carefully, it can stay separate property at the time of separation.

It can become relationship property however, if with express or implied consent of the receiving spouse/partner, the property or proceeds of sale of that property are so intermingled with relationship property that is unreasonable or impracticable to regard that property as separate property.

So, in short, the separate property needs to have been purposefully or intended to be used for the benefit of your relationship and it needs to now be mixed with relationship property beyond recognition of the initial contribution, to be classed as relationship property. A classic example of this is when inheritance received is then placed into a joint account to pay off relationship debts or to buy assets such as vehicles, which are owned and/or enjoyed by both you and your spouse/partner.

Property acquired by gift from your spouse or partner is separate property, so long as it is not used for the benefit of both spouses. For example, if your spouse or partner buys you a boat for a birthday present, it will become relationship property if they use the boat or if you go away on a family holiday on the boat.

If you are engaged, married, or in a civil union, and your partner/spouse or civil union partner buys you an engagement ring, that remains your separate property.

If you need clarification on whether certain property is separate or relationship property, it is always best to seek further advice from an experienced Family Lawyer.

 

Shaun Cousins

Family Lawyer
Wellington