Relationship PropertyWho Gets What?

When a relationship ends, one of the biggest questions is often: Who gets what?

Many people assume the answer is simply "50/50". But relationship property in New Zealand can be more complicated than that.

The rules can apply to married couples, civil unions and many de facto relationships, and questions can arise around the family home, savings, KiwiSaver, investments, businesses, debts, inheritances and other assets.

Understanding which questions may be relevant to your situation can make it much easier to know when to seek legal help.

Why it matters

The Property (Relationships) Act 1976 provides the main legal framework for dividing property when relationships end in New Zealand.

Equal sharing is an important principle under the Act where the relevant rules apply. However, this doesn't mean that every asset owned by either person is automatically divided equally.

A key issue can be whether something is considered relationship property or separate property. How property was acquired, how it was used during the relationship and the circumstances of the relationship can all be relevant.

This is one reason why two separations that initially look quite similar can raise very different legal questions.

Things you might not know

The family home can have special significance

One common assumption is that whoever originally bought the house - or whose name appears on the title - will necessarily keep it after separation.

The position can be more complicated.

The family home has particular significance under New Zealand relationship property law, and ownership before the relationship or the name on the title may not, by itself, determine the final position.

This can come as a surprise, particularly where one partner owned the property before the relationship began.

You don't necessarily have to be married

Relationship property law isn't limited to married couples.

De facto relationships can also be covered by the Property (Relationships) Act.

The duration and nature of the relationship can be important. The three-year point is particularly significant under the legislation, but determining whether a de facto relationship exists - and when it began - can involve more than simply asking when two people moved in together.

Shorter relationships can be treated differently and may raise additional questions depending on the circumstances.

KiwiSaver can be relevant

Another common misconception is that KiwiSaver is automatically outside a relationship property settlement because the account is held in one person's name.

In fact, KiwiSaver may form part of the relationship property picture.

The treatment of KiwiSaver can depend on matters such as contributions and value accumulated during the relationship and the particular circumstances involved.

Property owned before the relationship isn't always straightforward

Property that someone owned before entering a relationship may potentially be treated differently from property acquired together.

Similarly, inheritances and gifts can raise separate-property questions.

However, the position can become more complicated when different types of property or funds have been combined, used for relationship purposes or changed in value during the relationship.

This is why simply asking "Whose name is it in?" doesn't always provide the full answer.

50/50 doesn't necessarily mean every asset is split in half

Even where equal sharing applies, that doesn't necessarily mean each individual asset must literally be divided into two equal parts.

A relationship property settlement can involve looking at the overall pool of relevant assets and liabilities.

For example, questions may arise about whether one person retains a particular asset while other property or payments are dealt with differently as part of the overall settlement.

Businesses can make relationship property more complex

Where one or both partners own a business, company or partnership, additional questions can arise.

The timing of when the business was established, changes in its value, contributions made during the relationship and the way ownership is structured may all be relevant depending on the circumstances.

Business interests can also require valuation, which can make these matters more complex than dividing straightforward personal assets.

Trusts don't necessarily make the questions disappear

Assets connected with a family trust can add another layer of complexity.

The existence of a trust doesn't necessarily mean there are no relationship property issues to consider. The structure of the trust, how assets came to be held by it and the particular circumstances can all be relevant.

Where significant assets are held through trusts or companies, obtaining advice from a lawyer experienced in relationship property can be particularly useful.

Common questions

People dealing with relationship property often want to know:

• •What happens to the family home?
• •What if I owned the house before the relationship?
• •What happens to our mortgage and other debts?
• •Is KiwiSaver included?
• •What if we were never married?
• •What happens to an inheritance or gift?
• •What if one of us owns a business?
• •What happens if assets are held in a trust?
• •Can we agree between ourselves who keeps what?
• •Do we both need our own lawyers?

There isn't necessarily one answer that applies to every couple. Relationship history, property ownership, financial arrangements and family circumstances can all affect which legal issues need to be considered.

When can a relationship property lawyer help?

You don't have to wait until a property disagreement has developed into a major dispute before speaking with a lawyer.

A relationship property lawyer can explain the relevant New Zealand law, review the circumstances of a particular relationship and help clarify which property and financial issues may need to be considered.

Legal assistance can also be useful where a couple largely agrees about how they would like to divide their property but needs to understand the legal process and requirements involved.

For more complex situations - such as significant property, businesses, trusts, inheritances or disagreements about what belongs to whom - finding a lawyer with the right relationship property experience can be particularly important.