New Zealand’s Long Term Skills ShortageFebruary 11, 2019
Are You Thinking of Renting Your Property?March 15, 2019
Are you married or in a de facto relationship? Are you thinking of moving in with that special someone? Do you already have a contracting out agreement in place? If you answered yes to any of these questions, you need to be aware of the Property (Relationships) Act and the recent changes proposed by the Law Commission.
The Act applies to relationships of three or more years (whether married, in a civil union or a de facto relationship) although it could apply sooner depending on the circumstances. It dictates the division of property in the event your relationship comes to an end, either through separation or death. The general premise of the Act is that a couple’s property will be shared equally between them, regardless of who bought the property to the relationship, unless a justifiable exemption applies.
The Law Commission has recently completed a review of the Act and has proposed substantial changes. These changes are as follows:
- To treat property acquired by one partner before the relationship began (including the family home), or inherited during it, as a separate asset that is not to be divided equally. The other partner should be entitled to only half the increase in capital value of the property during the relationship;
- When couples have children and been in a relationship for 10 or more years, or have developed or given up careers due to the relationship, they may qualify to enter into a family income-sharing arrangement, which would enable the combined income of the couple to continue to be shared. That would be dependent on how long the couple had been together, up to a maximum of five years;
- The parent who has the day-to-day care of the children should have automatic rights to remain in the family home post-separation for a limited period;
- The provision of additional powers to enable the Family Court to intervene in contracting out agreements if the agreement causes a serious injustice, particularly with the best interests of the children;
- Enable the Family Court to use trust property for the benefit of each party and the children regardless of who the trust beneficiaries are when a trust holds property that was produced, preserved or enhanced by the relationship. At present, if a trust is involved, the Family Court has limited jurisdiction and often such matters need to be referred to the High Court which is expensive and time-consuming. The new Act will see the Family Court having increased jurisdiction where trusts are involved;
- Provide the Family Court with wider powers to deal with parties whose conduct causes unnecessary delay and expense to the other party;
- Introduce rules that make sure partners properly disclose to each other all relevant information about their property, whether or not they go to court; and
- Develop a comprehensive information guide for separating partners which explain the law and provides information about the different options available for resolving a dispute.
For more information, please don’t hesitate to contact us at Wakefields on 04 970 3600 or email email@example.com.