Have You Separated? Are You Thinking of Separating?

If you’ve just separated or you are thinking of ending a relationship then you’ll have lots of questions about what your legal rights are, and what property or money you’re entitled to.

Under the Property (Relationships) Act, if you’re married, in a civil union or have been in a de facto relationship (usually this means living together) for more than three years, then the presumption is that all relationship assets and debts are divided 50/50.  An equal division will not apply if you and your partner have previously entered into a Contracting Out agreement (prenup).

Some things you’ll need to consider when separating are:

• The house – who is going to stay living in the house … can they afford to?  Whoever remains living in the house is responsible for meeting the mortgage, rates and other outgoings on the home.  Are you going to sell the house, is one of you going to buy out the other persons share, or will you both move out and rent the property?
• The furniture/chattels – are you each going to take half of the furniture, or will one person retain more furniture than the other?  If one person retains more than half of the chattels then the other person is entitled to receive compensation for their half value of the chattels.
• Bank accounts – do you have a joint bank account that one or both of your salaries are paid into? From the point you separate it’s advisable to set up your own separate bank account and have your salary paid into it.  If you’re still sharing costs, such as the mortgage or costs for the children then you can pay your share of these costs from your separate account into the joint account.
• Other assets – what other assets do you have? Cars?  A business?  Superannuation?  Life Insurance?  To help decide how any division of property is going to occur you’ll need to know the value of any assets at the time you separated.
• Debts – what debts do you have?  What is the balance owing on the mortgage at the time you separate?  Do you have credit cards?  Other loans?  Hire purchase agreements?  The bank and other lenders don’t care that you’ve separated, they will still expect repayment of any debts from the person/people whose name the debt is in.
• Post separation contributions – if you’ve paid relationship expenses for a period after separation then you may be entitled to reimbursement for some or all of these payments. This can include mortgage repayments if you’re not living in the home but have paid some or all of the mortgage since separation.
• Occupational rent – if you have moved out of the home but your partner has stayed in the home, then you may be entitled to receive an occupational rent payment from your partner.  This payment covers the period from separation until the new ownership of the house is finalised.
• Trusts – do you or your partner have a Trust? If so this may affect the way property is divided.  It will help your lawyer if you have a copy of the Trust deed so that they can confirm whether you are a trustee and/or a beneficiary of the Trust.
• Child support – if you and your partner have children together, then the person who does not have the day to day care of the children is obligated to pay child support, to assist with the cost of raising the children.  You can find out an indication of the amount of child support that is required from www.ird.govt.nz
• Spousal maintenance – have you or your partner made sacrifices to a career, to assist/ promote the other partner’s career (for example staying at home to raise children and run the household)?  If so, the non sacrificing partner may have to pay spousal maintenance for a period after separation.  This payment is to assist the other partner to get back into the work force or to become financially independent.
• Counselling – your local Family Court offers free relationship counselling, this can be used to try and reconcile or to discuss issues about property and/or children.
• Divorce – you cannot apply for a dissolution (divorce) until you and your spouse have been separated for two years.

Any decisions you and your partner reach on the division of property should be recorded in a written Separation Agreement; this prevents either party trying to change the division of property later on.  For a Separation Agreement to be legally binding, both you and your partner must receive independent legal advice on it and your signatures on the Agreement need to be witnessed by your own lawyers.

If you have any questions, or would like to arrange a Separation Agreement, contact us on (04) 473 6850.