Relationship property divisions: when a relationship breaks down

Palmerston North lawyer Richard Small.

This article concerns what you may be entitled to, with respect to relationship property, if you separate from your spouse or partner.

If my wife is reading this- sweetheart look away!

Relationship property divisions are governed by the Property (Relationships) Act 1976.

Don't let the year of the Act fool you, as it actually passed into law under the Clarke government in 2001 and replaced a previous matrimonial property act from 1976.

The Act only applies to marriages, civil unions or de facto relationships of at least three years duration (with limited exceptions).

It takes into account the total length of the relationship, so for example if you and your partner lived together as a de facto couple for two years before getting married, and then separated two years after the marriage, the Act looks at the whole relationship as having been four years in duration.

Couples are free to make an agreement between themselves at any time, including after separation, rather than relying on their rights under the Act.

These kinds of agreements are commonly called "Contracting Out" agreements (because you are contracting out of the rights and obligations under the 1976 Act) or "Section 21" agreements (named after the section of the Act that allows you to make such an agreement).

They are also sometimes colloquially referred to as "pre-nups" if the parties look to enter them before getting married.

These are all different names for the same type of agreement.

The only requirement for entry into such a binding agreement is that you both obtain independent legal advice and have your lawyer sign the agreement, to certify that they have given you advice about the agreement and your rights.

Your lawyer will likely ask some difficult questions and require an indemnity if the agreement substantially disadvantages one of the parties.

In terms of the division of relationship property under the 1976 Act in the absence of an agreement, the starting point is a presumption that all relationship property will be equally divided between spouses, civil union or de facto partners.

This is especially so in the case of the family home and chattels. It is possible for one party to seek more than their 50 per cent entitlement to relationship property on the basis of their contribution to the relationship, although importantly the Act attaches equal importance to financial and non-financial contributions.

If you have questions about relationship property, including protecting yourself in the event of a future break-up, it is important to speak with your lawyer at the earliest opportunity.

Richard Small is a senior solicitor at Jacobs Florentine. The information above is general only and cannot replace specialist advice. The writer accepts no responsibility or liability for reliance on, or use of, this article.