When relationships encounter bumps or reach their endpoint, understanding the intricacies of property division is crucial. The Property (Relationships) Act 1976 governs the distribution of a couple’s assets upon separation or death, applicable to married, civil union, or cohabitating partners of three years or more.

Decoding Relationship Property:

“Relationship property” encompasses assets like the family home, family chattels, and contributions to superannuation or KiwiSavers during the relationship. Debts, such as those for family holidays or purchasing a family car, are also considered relationship property. In contrast, “separate property” includes assets acquired before the relationship, gifts, or inheritance, provided they remain separate from relationship property.

Future-Proofing Your Assets:

To safeguard assets in case of a breakup, a contracting out agreement, akin to a prenuptial agreement, offers a proactive solution. This agreement allows partners to establish rules for property ownership and division, essentially opting out of the Act’s provisions. Validity requires written documentation, signed by both parties, with mandatory independent legal advice before entering the agreement.

Separation Agreements:

For those without a foresighted plan, navigating the aftermath of a breakup can be overwhelming. Divorce involves applying to the family court for an order dissolving the marriage, possible after living apart for two years. To divide property amicably, partners can opt for a separation agreement – a legally binding document formalizing asset and liability division. Similar to a contracting out agreement, a separation agreement requires legal advice for both parties.

Resolving Disputes Without Court:

In cases of disagreement on property division, resorting to the family court is an option, but it can be a lengthy and costly process. Opting for out-of-court resolutions, such as separation or contracting out agreements, is generally in the parties’ best interests.

Demystifying Contracting Out Agreements:

Contrary to the misconception that these agreements are solely for the wealthy hiding assets, contracting out agreements are valuable for anyone with relationship property. By fostering early discussions about finances, these agreements set the stage for greater understanding and fewer disagreements after separation.

In conclusion, navigating the complexities of relationship property involves proactive measures like contracting out agreements, fostering open communication, and seeking legal advice. Understanding the legal landscape ensures a smoother journey through the intricacies of property division.