Division of property
Your relationship property is usually divided on a 50:50 basis after a marriage or committed relationship that lasts three years or more. Couples in a relationship of less than 3 years can in some circumstances have their property divided on the basis of their contributions.
While that sounds simple enough, working out what it means in your case may not be straightforward.
The family home and family chattels are to be divided equally, and in practice it is usually the same equal division for other property.
When it comes to entering into Agreement or having the Court order a division of property, it is usually the current value of property that is used. However some property, such as your bank account balances and superannuation entitlements, may have an earlier valuation date, usually the date the relationship ended with separation or living apart. The rationale is because at the living apart date the partners or spouses ceased to be in partnership and have now gone their own way financially.
The half division of a Superannuation or Kiwisaver entitlement is of its relationship component, in other words what property was built up between the start of the relationship and when the parties ceased to live together.
Professional valuers may be needed when values cannot be agreed. This may be a Registered Valuer for real estate, an Actuary for superannuation, and increasingly Forensic Accountants to value interests in a business, company or Trust.
Sometimes a relationship breakup means one partner’s income and living standards are likely to be significantly higher than the other because of what has happened during the relationship. One such scenario is a mother out of the workforce caring for children, while the father’s career has taken off and his earning potential has increased.
In these circumstances the Court can award a lump sum to be paid to the so disadvantaged partner out of the other party’s relationship property entitlement.
A recent Supreme Court decision has bolstered the entitlement of the disadvantaged party to this remedy. Sometimes expert accounting advice is necessary to calculate and quantify this likely entitlement.
On living apart one partner may need continued occupation of the family home as an interim measure. If agreement cannot be reached, the Family Court can order an Occupation Order. This usually happens when there are children who need the continued security of a stable home environment.
In some circumstances the occupying parent may need to later reimburse the other owner for what is termed an occupation rental.
For an Agreement about your relationship property to be binding there are some formalities. It must be in writing and the independent lawyers for each party must sign a certificate on it that says you have received advice and you know what you are doing.
Other Agreements, for example about the children’s care arrangements, spousal maintenance or child support do not need that certificate. Everything that is agreed can still be put in the one Agreement which has the lawyer’s certificate.