A contracting-out agreement is a written document that legally binds two people to how property is to be divided if the relationship ends. Humans in love tend to not focus on the negatives, but many relationships do end eventually and the cost of dividing the property can be high. Portia recommends a contracting-out agreement when going into any relationship where one party solely owns the family home; there has been a previous relationship for one or both parties, resulting in significant property for one party; there are children from a previous relationship and their interest or entitlement needs to be protected; one party has significant debt, or; you simply do not want to risk having to share assets and debt equally.
New Zealand law states that if you marry someone (or enter into a civil union, or live together for three years) then you might be liable for that debt if the relationship doesn’t work out. In addition if your partner is irresponsible with money and spending while you are together – and doesn’t tell you – then you could be paying the price of that trust now. It is important you speak to a lawyer if you are concerned about debt you have ‘caught’ off your partner.
* Phrase coined by CESI Debt Solutions, published Time Magazine 09 February 2011
If your partner has died and didn’t have a will then you will likely need good legal advice as soon as possible.
When a couple gets married any previous wills in force for either party are instantly revoked unless the parties’ wills were specifically made in contemplation of marriage. This means that unless a new will is made and a party dies, then they are intestate, and their property will be divided according to the Administration Act 1969. You should also consider the impact of a sudden death if you have no contracting-out agreement, particularly around the repayment of debt.
In New Zealand it is possible to contract out from the presumption of equal sharing in all relationship property and debt. A contracting out agreement (also known as a pre-nuptial agreement) protects each of the spouse’s or partner’s individual interests in property. Such an agreement specifies the ownership and entitlements of each party in the property and debt. Although a contracting out agreement can be obtained at any point during the relationship, it is recommended that an agreement is entered into as early as possible.
The law in New Zealand states when a marriage, de-facto relationship or civil union ends, there is a presumption of equal sharing in all relationship property and relationship debt. The Property (Relationships) Act 1976 defines “relationship property” as all property acquired for or during the relationship. This also includes property acquired by one party prior to the relationship commencing, if it is used for the benefit of the relationship. The definition further states that relationship property includes the family home, whenever it is acquired. The family home is generally defined as the main residence for the couple or family during the relationship.
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Relationship property may be divided by agreement (either directly or via a mediator), or it can be ordered by a Family Court Judge.
If an agreement can't be reached between you and your ex, the matter may be decided by a Family Court Judge. The starting point for division of relationship property is 50/50 equal share, however the outcome can be influenced by a number of things (such as whether a contracting-out agreement was signed).
The Family Court may order the sale of relationship property and the division of the profits to you and your ex-partner.
At the very foundation of the law, yes. However there are a number of factors that can change the ratio. You should speak with an expert relationship property lawyer to get a clear understanding of your particular situation.
Pets are considered to be 'chattels' under the law. While the Family Court deals with major relationship property (in particular houses and businesses) they are less likely to recognise a pet as property that can be subjected to its jurisdiction. Your best chance is to try to settle the matter directly with your ex-partner, or if that fails, seek the help of an experienced mediation service like Fair Way Resolution.
A relationship property agreement is not the same as a contracting-out agreement (pre-nup). If you do not have a contracting-out agreement in place and your relationship ends, then you might need to negotiate a relationship property agreement or ask the Family Court to make a final order to settle any dispute. The relationship property agreement is what is signed by both parties and allows for the property to be divided. If there is disagreement then cost for this would be in the range of $7,700 to $11,600 and includes the fee for mediation. If both parties were in agreement then expect a cost between $2,700 and $6,600. litigation (going to court) would be far more expensive.
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