When you are married, in a civil union, or de facto relationship, you are subject to relationship property laws. 

All property that falls to be divided under relationship property law will either be your separate property or relationship property.  You will take all your separate property with you on separation.  All relationship property will be shared 50/50 on separation.

In some instances separate property can become relationship property.  Relationship property laws allow for this, as an example, where there has been an increase in value of separate property, and this increase is attributable (wholly or in part, and whether directly or indirectly) to the actions of the other partner.
It is the increase in value of the affected separate property that is relationship property.  The share of each partner in that relationship property is determined in accordance with their respective contributions to the increase in value.

In a recent leading case in this area a couple separated after a 24 year marriage.  At the time of the marriage the husband was in partnership with his father and brother, farming three properties.  The partnership farmed the properties but did not own them. 

At various times substantial parts of the farms were sold by the owner, the father, to reduce debt levels.  When the father died the brothers inherited the balance of his farm.      

The Court said “… an increase in value is divisible between the parties unless it can truly be said that it has not derived from the conduct of the non owning spouse in any material way.  That may be the situation in the case of a purely passive investment but, with an asset like a farm or other business in which the owning spouse works, it will often be likely that some conduct of the non owning spouse will have had some direct or indirect influence on any increase in value.”

The Court found that the wife’s attentions to the household and the children, and her paying a large proportion of the family’s domestic expenses with her earnings from employment, enabled her husband to spend very long hours on partnership affairs and allowed him to reduce his drawing so that more labour and money was available to the partners for the development of the farm.

She was then entitled to a share in the increase in value of her husband’s interest in the farm, which otherwise would normally have been separate property.

If you take property into a relationship it is always prudent to seek advice as to how best to protect your assets from future relationship property claims.

Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.