Rebecca Holm
Family Law Barrister

Relationship Property

Before you see your lawyer it is worth being aware of how the relationship property process works.

Your income during the relationship is likely to be relationship property, but after the relationship, it is your separate property.  Once you have separated you are each responsible for your own debts and assets and so it is useful to be able to calculate your contributions post separation and work out who pays what without paying your lawyer or accountant to go through numerous transactions.  My suggestion is that you agree on how to organise your accounts.  Decide if you are each to put a certain amount into a joint account that is to be used exclusively for joint expenses. Your income can go into your separate accounts and you can pay your personal expenses from this account.  

If one of you is living in the home and the other is not, it is useful to treat expenses in this way:  You are jointly the landlord and the person living in the home is the tenant.  Pay as joint expenses what a landlord would such as rates mortgage etc and pay individually for power, phone etc.

If your relationship is still fairly amicable it may be that you can agree on a division of most items; first go to your lawyer with a list of your significant assets and liabilities with how and when they were acquired with their values.  Your lawyer can guide you as to how they are likely to be categorised in the first meeting and then you can sit down with your ex partner (perhaps with a third person present such as a counselor) and agree on how items are to be valued and distributed.

I recommend meeting with your lawyer before any meeting with your ex partner to discuss property.  

What you agree on is not legally binding until it has met the requirements of section 21 of the property (relationships) Act 1976, including that your are advsied by independent lawyers.  What you say if the meeting is not without prejudice may be used by the other sides's lawyer in the future however.

Some clients try to "help" by drafting the agreement themselves.  Taking this step is likely to increase rather than reduce your costs.  It is easier for the lawyer to place values in their precedent than to decipher a client's attempt as an agreement.  If you want to help give your lawyer a list of what you should each receive in a table so that it can be easily seen what you each get, with the value for each item and a total to show the value you each receive.  This table will make it easy to see what a fair division is, or whether there is a need for a cash adjustment.

Your lawyer will want proof of value for significant assets.  your lawyer has to sign a certificate that they have advised you as to your legal rights before you signed the agreement;  they must therefore be able to tell you what you are likely to receive should your matter have gone to court.  For your car go to car dealer or agree on a price.  For your bank accounts obtain the balance at separation.  For Superannuation gather the certificate of value and advise your lawyer of payments made before or after the relationship. 

The more reliable the valuation of substantial assets the better are the chances of the agreement not being challenged.  For the house,  if the matter went to court it would require a registered valuation, this is the best type of valuation to obtain, but remember that the value will only be accurate for a limited time.  When you are still working through agreeing on all points and working on if one can afford to buy the other out you may wish to get an assessment from a real estate agent and get the registered valuation when the agreement is close to being finalised.

To be legally binding it is not sufficient that an agreement about relationship property is in writing, it needs to be properly prepared and signed by both parties, witnessed by their lawyers and the certificate signed by the lawyers who witnessed it that they have provided independent legal advice.

 

 

 

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North Shore Legal Chambers
Unit L1, 75 Corinthian Drive Albany 0632
P.O Box 302 795 North Harbour
Phone: 09 414 7258
Email: rebecca@nslc.co.nz