When a couple separate in New Zealand, the general rule under the Property (Relationships) Act is that if they have been in a qualifying relationship for 3 years or more all of their relationship property will be divided equally.

A qualifying relationship includes a marriage, civil union or de facto relationship.  For more information on de facto relationships see http://www.raineycollins.co.nz/your-resources/articles/de-facto-relationship-even-though-separate-addresses.

 “Relationship Property” includes assets and debts and will include the following:

  • The family home, whenever acquired.
  • All family chattels, whenever acquired (whether pre-relationship or during), which includes all household appliances, furniture, motor vehicles, caravans, trailers or boats that are used for family purposes, and household pets.
  • All property owned jointly, or in common in equal shares, by the couple.
  • All property owned by either spouse or partner immediately before their relationship began if the property was acquired in contemplation of that relationship and was intended for the common use or common benefit of the parties.
  • Property acquired during the relationship (although this is subject to various exceptions).
  • Property acquired during the relationship for the common use or common benefit of the parties.
  • The proportion of any life insurance policy or superannuation scheme that is attributable to the relationship.
  • Income earned during the relationship.
  • Relationship debts (which could include debts in one party’s name).

A husband and wife separated, having been married for 1 year and in a de facto relationship for 4 years prior to marriage.  When they separated they needed to divide their relationship property.

Because they had been together for over 3 years this included the home that they lived in, that the wife had owned prior to their relationship.  It also included all savings she had accumulated during their relationship as well as the husband’s Kiwisaver scheme balance (he started with Kiwisaver when their relationship first began).

Although the wife in this situation could make a claim in respect of the husband’s Kiwisaver scheme, he would be able to claim an equal interest in the home and her savings even though they were in her sole name.  This is because those items are relationship property.

If the parties did not want their assets to be divided upon separation in accordance with the general 50/50 provisions, they could have entered into a relationship property agreement contracting out of the equal division rules.  The wife could have protected her home and any other assets as her separate property so that it would not have been subject to equal division following their separation.

In order for any relationship property agreement to be binding it must be in writing, signed by both parties and witnessed by their independent lawyers.  Each independent lawyer must also advise their client as to the effects and implications of the agreement before signing it.

David Tyree
Family Lawyer
Wellington