Ngaire was one unhappy woman. Her friend had warned her that she was about to lose half her carefully squirelled away Kiwisaver and superannuation funds to her husband, Greg. Greg and Ngaire had recently separated, a decision largely driven by Ngaire because she couldn’t carry on living with Greg’s “irresponsibility” any longer.
Ngaire had married Greg 5 years ago after a very whirlwind relationship. It was all quite a rush for Ngaire at the time. She was 45 years old when they met. Long before that she had watched friends marry and have families and had come to a level of acceptance that perhaps this wasn’t going to happen for her. So, meeting Greg was a pleasant and exciting surprise to Ngaire.
Ngaire, being keenly aware of her single status and need to financially provide for herself, was quite the planner and relatively conservative in her spending habits. Greg, on the other hand, was spontaneous and adventurous. Ngaire found his “it’ll be right, live for the day” approach to life intoxicating and exciting at first but, as time wore on, it began to wear thin and became a source of conflict for them. She now regards their early relationship as “a period of temporary insanity” for her.
Ngaire was a great saver. She had a solid sum already saved in her superannuation scheme when she met Greg. As soon as Kiwisaver was introduced, she joined and made the maximum contributions she could so there was a nice amount there too. On the other hand, Greg had little savings and no superannuation or Kiwisaver when they met. After they married, Ngaire managed to get Greg on board with Kiwisaver but he only ever made the minimum contribution from his wages as he felt it important to have money to spend on life’s pleasures as well.
Ultimately, Ngaire found it just too hard “living on the edge” from one adventure to another with Greg and she moved from their home. She thought they had come to relatively amicable agreements over a coffee together about dividing the home, their bank accounts and the chattels and that they were sorted. However, at a BBQ the other night, her friend announced that superannuation and Kiwisaver were also relationship property to be divided. This sent Ngaire scurrying to see me in a panic. All Ngaire could see was her years of careful spending and saving for her retirement (while Greg was “off having fun, being irresponsible”) being all for nothing if Greg could walk off with half of it. She was particularly appalled at the prospect of him “frittering it all away” on travel and mountain biking gear.
I first checked whether Ngaire, being the financially risk averse person she is, had entered into a contracting out (pre nup) agreement with Greg. This may have preserved her retirement savings as her own property should they separate. No such luck – so giddy with the romance of it all, Ngaire really didn’t feel one was needed and besides, getting Greg to a lawyer would have been almost impossible.
So, what was to happen to Ngaire’s superannuation and the Kiwisaver she and Greg had?
Ngaire’s friend was partly right.
Relationship property law treats superannuation and Kiwisaver funds as relationship property that to be divided equally between both spouses. Ngaire was beside herself – she had significantly more in her Kiwisaver and superannuation than Greg did because of the contributions she had made before they met!
However, all was not lost. The law recognises that often superannuation savings may have been in place before the relationship. In such cases, the relationship property amount that is to be divided is limited to the portion of the superannuation’s value that is attributable to the relationship. With an actuary’s help we were able to calculate what portion was attributable to Ngaire’s pre-marriage savings and what portion related to the marriage. It was still a bitter pill for Ngaire to swallow that her higher dedication to saving for retirement during the marriage was going to benefit Greg. After some discussion, she recognised that during the marriage she had benefitted from his income that was spent on their adventures and travel and ultimately she was relieved that her pre marriage retirement savings were to remain hers.
If, like Ngaire, you have a relationship property issue you need help to resolve then give Family Law Results a call on (09) 297 2010.
The family who had just appeared in Court were all in tears as we walked out. There were hugs and expressions of gratitude all round and a huge sense of relief. A monumental event had just occurred for this family. My clients had successfully adopted a child born to other family members. The reasons why this arose are long and unnecessary to dwell on here. Suffice to say, the child’s parents were fully supportive of the adoption and a long family tradition and culture of informal and formal adoptions within the family preceded the child.
When I am approached to assist with an adoption of a child by members of its family, I begin by cautioning them that the Family Court may not grant an adoption. This is due to a concern that an adoption will legally distort the child’s relationships. For example, take an adoption by a grandmother of her daughter’s daughter (her granddaughter). After the adoption, in the eyes of the law, the grandmother is now the child’s mother, the child’s mother is now her sister, the child’s siblings are now her nieces and nephews… and so it goes on.
To avoid this distortion, parenting and guardianship orders are often used instead of an adoption. Such orders don’t legally change the family relationships but give the family members who are caring for the child the rights of a guardian to make decisions about the child’s welfare and rights to the child’s day to day care. The child’s biological parents retain their guardianship and legal rights to seek contact with the child.
But what, as for my clients, the security and certainty of adoption is really what the family all seek? There is no absolute rule against family members adopting a child of their family. The concern about the distortion of family relationships is just one factor to be taken into account by the Court. The Court must decide if the adoption will promote the child’s welfare and in doing so, must balance a range of factors.
Increasingly, one of the factors that may be relevant is the culture of the child and parties. This was a particularly important consideration in the adoption I began this blog referring to. What role, culturally, do wider family members have in the raising of a child? What is the relevant cultural perspective of adoption?
Over 20 years ago, the High Court indicated that it could not see why full regard shouldn’t be had to the cultural attitude to adoption of the family concerned. Time has marched on since then and with it, our society is increasingly multicultural. In step with this, the Court has recognised in several cases (including the case of my clients above) that adoption cannot be viewed through a European or Pakeha lens alone. An adoption that may be considered inappropriate in a European setting may well promote the welfare of a child in a Maori, Pasifika or Asian family.
The Adoption Act is widely regarded as outmoded and overtaken by changes in society’s values and make-up. This recognition of other cultural perspectives is an example of how the Courts will attempt to make the Act work as best as possible in response to those changes.
Got a query about adoption? Give us a call at Family Law Results on ph 0064 9 297 2010 or email us at lawyers@familylawresults.co.nz.
Steven called me in a very stressed state. He had split up with his girlfriend, Angela, a few months ago. Angela is pregnant with their child – a girl due in 3 months. Steven is looking forward to becoming a father even though he and Angela are no longer together as a couple. Steven has just learned that Angela has contacted Child, Youth and Family about having their baby placed for adoption after birth. Steven told me that his biggest fear was that Angela would have his daughter adopted without him having any say in the matter. Can she do this?
Before an adoption can occur, the consent of the child’s father is required if he is (or was) married to the child’s mother or if he is (or was) a guardian of the child. If the father is not married to the child’s mother or isn’t a guardian of the child, the Family Court has a discretion to require a father’s consent to the adoption if it considers it “expedient” to do so. The Family Court will usually find it is expedient to obtain a father’s consent to adoption if the father has been involved in the support or upbringing of the child or if he has taken steps to apply for guardianship or parenting orders for the child.
Steven and Angela weren’t married but it is likely he will be a guardian of their child. As a guardian, his consent to any adoption would be required. A father will be a guardian of a child if he is registered on that child’s birth certificate as the child’s father. There is a legal obligation on both parents to register their child’s birth and have their details recorded on the birth certificate. The exceptions to this are very limited. A father can also become a guardian by being appointed as such by the Family Court.
Steven was concerned about how the Court will know of his role as the child’s father. Child, Youth and Family (CYF) is not legally obliged to identify or make contact with the birth father. That doesn’t prevent Steven from initiating contact with CYF about the proposed adoption although he may be frustrated by CYF having a duty of confidentiality to the child’s mother. Furthermore, an adoption cannot proceed without the birth certificate having been issued and provided to the Court. Furthermore, a child’s mother needs to provide evidence to the Court about who the child’s father is and CYF is encouraged to include information about the father in its report to the Court.
As Steven could see, the birth certificate registration process shortly after the birth of his daughter was important in establishing him as a guardian with the legal rights and responsibilities that come with that role. If you are a father who is concerned about your child being adopted or about your legal rights and responsibilities as a father then the best course of action is to seek advice sooner, rather than later.
If you have an adoption issue or question about your rights as a parent, then call Family Law Results on (0064) (9) 297 2010 or send us an email to lawyers@familylawresults.co.nz to discuss how we can help.
An enquiry came into Family Law Results’ website that was similar in theme to other enquiries we regularly receive about child support:
“I need financial assistance for my children from their father, my ex husband. I don’t know if it is worth applying now for child support because he refuses to pay. He’s self employed and I am scared he will just hide his considerable income”.
What do you do in the situation where you aren’t receiving financial support for your children from their other parent? Perhaps the other parent is on a low income or, like this enquirer, you fear he or she will “hide” the true extent of his or her income. Like the enquirer above, you may be feeling the situation is so futile that it is not worth applying to IRD for an assessment and collection of child support.
I struggle to see any merit in “not bothering” to apply for child support in circumstances where coming to a private agreement with the other parent is not possible. By deciding it is not worth applying because your ex won’t pay, you are creating a self fulfilling prophecy – you are guaranteed of one thing: to receive no child support! When you apply for child support, IRD will assess how much is to be paid and will set about collecting it.
One thing you shouldn’t do is delay applying for child support. IRD does not back-date a parent’s child support liability. This means IRD will only assess and collect child support from the date it receives the application so delaying an application merely results in increasing the period of time for which you do not receive any support. Sometimes the lodging of an application sharply focuses the other parent’s attention on the issue and further discussions ensue resulting in an agreement. By making your application, you are at least getting some child support in the meantime. If things change and you come to an agreement about child support, you can always withdraw your application with IRD or lodge a voluntary agreement for IRD and ask IRD to collect the child support that is to be paid under that agreement.
IRD has a lot more tools for collecting child support at its disposal than you will have. For example, if a parent doesn’t pay, IRD can have the payments taken from that parent’s wages or bank account. IRD can also charge penalties for non payment and take legal action to recover owed child support.
Often people are concerned that the other parent will respond to a child support application by “hiding” their income through a trust or by being self employed. The result being that the parent is assessed to pay a lower amount of child support. This is a difficult scenario to resolve. When first assessing the amount of child support to be paid, IRD will use income information it holds from the previous calendar year (for salary and wage earners) or two tax years ago (for self employed or overseas parents). This makes it hard to initially “hide” income unless the other parent has been doing so for some time prior to the application. Later, if the other parent’s taxable income drops significantly, you can apply to IRD to review the resulting lower child support assessment on the basis that the other parent’s full income or earning capacity are not being fully taken into account in the assessment.
There are no easy solutions if a parent is determined to minimise their child support liability. However, for most people, getting something by making an IRD application is better than the alternative of receiving nothing.
For assistance with financial support and other family law issues, give Family Law Results a call on (09) 297 2010 or drop us an email at lawyers@familylawresults.co.nz.
Lance and Cerise had been living together for three years when Lance finally took the advice of Beyonce and “put a ring on it”. Cerise was ecstatic at the 1 caret of diamond and gold brilliance she now had sitting on her ring finger. She immediately got out the wedding folder she’d been storing bridal magazine cuttings in for years. She and Lance spent many week ends visiting potential wedding venues, booking caterers and deciding on invitations and table settings. The wedding plans were all going swimmingly until one day, Lance announced to Cerise that he couldn’t go through with the wedding. He believed he now had feelings for someone he had met on his indoor netball team and all this wedding planning was just too stressful for him!
Lance and Cerise were ultimately able to agree on how to divide most of their property except when it came to the issue of the engagement ring. Lance had used up a large part of his savings and borrowed some money to buy it so he argued he should get it back or at least be paid back for it by Cerise. Cerise, on the other hand, felt the ring was hers and that given he was the one to cancel the wedding, Lance shouldn’t add insult to injury and expect to keep the ring as well.
So what does the law say? Under our relationship property laws, gifts made to a partner for their use alone is the separate property of the recipient. A gift of jewellery will usually be the separate property of the recipient. Thus, unfortunately for Lance who is no longer taking advice from Beyonce, the engagement ring is Cerise’s to keep – it doesn’t form part of the relationship property pool for equal division.
Need assistance with a relationship property or separation issue of your own? Give us a call now to discuss how Family Law Results can help you: ph 0064 9 297 2010 or email lawyers@familylawresults.co.nz.
A reader of this blog asked whether a relationship home should be valued by a registered valuer or by a getting a number of real estate agents and whether the Court had a preference. Property valuation? Property appraisal? They’re the same, right? No, they are not and the distinctions between them can be important when it comes to making decisions about what is often the largest asset in a relationship property pool – the family home.
Firstly, let’s look at the differences between a registered valuation and a real estate agent’s appraisal. A valuation report can only be prepared by a registered valuer. A registered valuer will have undertaken considerable education and experience in order to be able to arrive at a definitive value for your home, taking into account a wide range of factors. A valuer will charge for his or her services. The valuer is legally responsible for his or her valuations and will base it on relevant evidence and information about the property (having viewed it), the market, Council zoning and any legal issues.
An appraisal can be done by a real estate agent and is an indicative estimate based on recent sales of properties in your area. It is not a true indication of the actual property value and often appraisals by different agents can vary considerably. An agent does not usually charge for an appraisal – it is often seen as part of their marketing to get your listing. An agent is also not legally responsible for the appraisal in the same way as a valuer is for a valuation.
So, faced with a relationship property division, when would you use an appraisal and when would you use a valuation? In large part the answer to this depends on what you intend to do with the home. If you and your spouse have agreed to sell the home then the market will ultimately determine the value of the home. Obtaining a number of real estate agents’ appraisals will help you decide on an agent to list with, how to market the property and the price range you may expect to sell for. If you and your ex cannot agree on these aspects of selling the home, then you may need to ask the Court to decide these issues in which case you will need a valuer’s report and recommendations as expert evidence for the Court.
If you are getting an appraisal, don’t rely on just one – get a number of them, take out any that are wildly varying from the rest and then take an average of the remaining appraisals. Being estimates, you will usually find they vary. I have seen clients impressed by a high appraisal only to be disappointed later when the market didn’t live up to the expectation this created.
If one of you is going to buy the other out of the home, then a registered valuation should be obtained as it will assist you each to make a properly informed decision about the purchase price to be paid. For the buying party, a valuation gives peace of mind that too much is not being paid for the property. For the selling party, a valuation gives peace of mind that an appropriate payment is being received for the home. Banks will usually require a registered valuation when considering an application for finance to purchase one party’s share of the home. Again, if there is an issue about the value to be attributed to the home for one person to purchase the other’s interest in it then valuations will be needed as expert evidence for the Court.
Some clients baulk at the prospect of paying for a valuation. However, most see the value in getting a valuation when they consider the peace of mind it gives them in being able to make informed decisions about . Often the valuer’s fee is more than recovered when the client receives the valuation and, recognising it differs from their estimate, revises their settlement proposals.
Got a relationship property issue? Call us at Family Law Results on 0064 9 297 2010 or lawyers@familylawresults.co.nz
“I’ve been paying Child Support but I don’t think I am the child’s father”. My client had been paying child support for quite a number of years for a child who, for a number of complicated reasons, he had not been having a relationship with. Information had recently come to light to suggest someone else was the child’s father. He wanted certainty. He needed to know.
This isn’t an uncommon scenario. I am increasingly having discussions like this with men who are feeling uncertain about whether they are actually the father of a child they thought was theirs. Peace of mind eludes these men and in many cases, is accompanied by a very real grief.
So, what happens next? This largely depends on the nature of the relationship you have with the child and the child’s mother. However, irrespective of this, it is important to resolve the issue sooner, rather than letting the uncertainty fester. My experience is that these issues don’t go away and are often more difficult to resolve and more traumatic for the child the longer the situation is allowed to continue.
People often overlook the implications for their estate of whether they are the father of a child or not. On your death, your children may bring claims against your estate if they are not provided for by you in your will. Thus, resolving now who your children actually are can avoid disagreements and costly legal issues for your loved ones and your estate to resolve after your death.
Sometimes whether you are a child’s father can be resolved promptly, without the need for Court involvement, by having a DNA test agreed to. However, it is important the test is done by a reputable laboratory with a very secure process. The Court, Internal Affairs and IRD may not accept test results that aren’t undertaken in such a manner.
Where agreement can’t be reached to having a DNA test undertaken, proceedings can be brought in the Family Court to determine the issue of whether you are the child’s father or not. The Court is likely to recommend DNA testing and, in some cases, will appoint itself a guardian of the child in order to ensure a child undergoes a DNA test.
Once the DNA results are back, this usually resolves the issue. If the test comes back confirming my client is the child’s father, there may be questions about his ongoing relationship with the child to resolve. If a test comes back showing he is not the child’s father, I work with my client to resolve any issues around correcting the child’s birth certificate and having IRD refund any child support paid unless the client is going to have to continue to pay as a “step – parent”.
Irrespective of the result of the DNA test and the emotions that result may bring, the peace of mind that had been eluding the client is achieved.
Got questions about how to resolve paternity issues? Contact the team at Family Law Results on 0064 9 297 2010 or at lawyers@familylawresults.co.nz.
When the very first internet message was sent 46 years ago, who could have envisaged the effect on divorces into the future. The Ashley Madison hack last year brought into stark light what research has been pointing out for a while – the impact of technology on relationships and its use in divorce proceedings. I am picking there are very few family lawyers, if any, who haven’t seen in their meeting rooms the fallout from the Ashley Madison hack or some other separation that resulted from a straying partner being found out through emails, text messages, social media posts or internet history searches. Such is the prevalence of internet communication in the stories family lawyers hear, we may find it hard to believe the first ever internet message was “login”, not “what are you wearing?”.
The internet has become a tool in the family lawyer’s toolbox. Increasingly, family lawyers have an arsenal of evidence at their disposal in the form of emails, text messages and social media posts written by the other party in litigation proceedings. So, what is important to remember about technology if you are in the midst of a separation or family law dispute?
Just how do you make that “relationship status update” – No longer is the carefully crafted, public ‘separation statement’ the sole domain of celebrities. I’ve mediated or been involved in a few separations where the couple have given consideration to how they announce their separation to the online world. This avoids one party being caught by surprise when they start receiving a barrage of comments and texts after their ex announces to the world his or her slant on their separation story or simply changes his or her “relationship status”.
Getting on the same page about how and when you will tell your online community that you are separating allows you both to control your privacy, gives you an opportunity to first tell close family and friends, allows you to prepare (emotionally and practically) for the inevitable comments and messages in response and sets a tone for your separation moving forward.
A report from the US indicates that separating couples there are going even further and entering agreements about what images and information can be shared digitally post separation. One can foresee this happening here, particularly around the issue of images of a separating couple’s children being shared online.
To remain friends or not – Similarly, some couples I’ve worked with have reached understandings about their future online relationship – to remain online “friends” or not? Again, this has the advantage of presenting to your online community the new relationship you share (or don’t) with one another, allows you to avoid hurt feelings and the fallout of these and to be mindful of just who will be reading your online posts.
You can run but you cannot hide – gone are the days where you may have been able to delay proceedings by avoiding service. Social Media and the internet is regularly used to track down contact details and information about a person who is proving difficult to serve with proceedings. There are now also cases where the Court has directed a party may be served through their Facebook or social media account.
Don’t vent and type – the angry text or email you just sent may well end up attached to an affidavit for the Family Court. Texts and emails with your ex partner are the next best thing to inviting a Judge to have a front row seat to your argument.
The only way to avoid this is to think carefully each time you text, email or message online. Is written communication the best approach or is the discussion better to be had in person at a pre-arranged meeting? Rather than just hitting “reply” to an email, start a fresh email and enter the email address last (to avoid any accidental “sends”). Take your time – draft your text or email then come back to it later and imagine how a Judge or respected family member or friend may view what you’ve drafted and the tone of it. Hit “send” only when you are sure the tone and message are right.
If you are tempted to have an angry vent about your ex partner online, think again. It could well end up attached to an affidavit or even be the subject of a defamation claim. Overseas, there have also been cases where the Court has punished a party for their online comments about their ex and cases where “gagging orders” have been made, stopping parties commenting online about their divorce. As the saying goes, if you can’t say anything nice…
Change your passwords – these days, we seem to have a password for everything. Although these are supposed to be private to the individual, it isn’t unusual for passwords to be shared between spouses or for them to be based upon things that are easily guessed by a former spouse. Change your passwords for all email and social media accounts you have and if you only have a joint email account, set up your own personal account for your post separation legal and personal correspondence.
For pragmatic reasons, you and your ex may still wish to share access to certain accounts for a period after your separation. However, think carefully about what accounts (phone, power, credit card, bank) you want your ex partner to still have access to and change the passwords to those that fall outside this.
Nothing is private – It is hard to maintain you can’t afford to pay more financial support when your ex has seen your photos on Facebook of your recent overseas holiday or your post asking for advice about the purchase of a new boat. Likewise, maintaining a message of sobriety isn’t possible when your Twitter account is littered with the insights you had last night while under the influence.
It is easy to assume that only those you’ve accepted as friends or contacts on your social media accounts can see your posts and photos and that, because your ex is no longer in that category, they won’t learn what you are posting. It is all too easy to forget to alter your settings to restrict who can see a post you have made. Even if you do set up your posts and photos so they are only seen by your friends, it is all too easy to lose your privacy if a friend shares your post. Ditto for photos your friends post of you.
In a similar vein, be careful about what you post to online groups. Even posts to closed groups may be seen by members of the group who know your ex and who may feel compelled to pass on the information.
The pocket dial – We’ve all done it. Left your phone unlocked and accidentally dialled a number, unaware the person called is now listening to you belt out a song while driving home. LOL. Not so funny if the pocket dialled is your ex who then listens to a conversation you’d rather she or he hadn’t heard. Believe me, its happened. Lock your phone.
What about the Kindle, iTunes, Apple accounts? When couples divide up their assets, they often overlook the online repositories they have for their music, books, games and movie collections. Often these are have had considerable money spent on them and they can also hold significant emotional value for one or both parties. Splitting up the music collection just got a whole lot more complex, especially when some providers have rules against splitting or copying accounts. If you have significant collections online, its best to raise this early with your lawyer so they can be negotiated in your property division.
Very few of us manage to live our lives untouched by technology and social media but some careful thinking before acting (or texting or posting…) can mean you avoid the risk of having your online communications becoming an issue in your separation or family law dispute.
At Family Law Results we are experienced at helping guide you through your separation or family law issue. Feel free to contact us at lawyers@familylawresults.co.nz or on 0064 9 297 2010.
A couple of weeks ago I wrote about some of the hoops to be jumped through in order to legally formalise an agreement about relationship property. One of the legal requirements for a relationship property agreement was that each party receives independent legal advice about the effects and implications of the agreement. In order to be valid, your agreement must be certified by your lawyer to show you have received independent legal advice about it.
So, what happens if you get independent advice and don’t wish to follow that advice? Does this mean your lawyer will refuse to sign the certificate on your agreement?
On several occasions, I have found myself in the situation of advising my client not to proceed with an agreement but where they adamantly wish to. On some occasions where I have felt the client had issues that impacted on their understanding of my advice or were unduly being pressured to sign, I have refused to certify the agreement until other steps were taken. However, on many occasions, I have signed the certificate even though entering the agreement was contrary to my advice to my client.
Consider one of my recent clients. We’ll call him David. My assessment of David’s agreement was that he was agreeing to his former partner receiving significantly more than would be required under a strict division in accordance with the Property (Relationships) Act 1976. I took David through what the law said about how their property should be divided. I advised him against the settlement. I worked up the numbers for him so he could see exactly how much less he was actually receiving and how big that figure was. I sent him away with my calculations to “sleep on it”.
David called me a couple of days later and said he had thought about my advice, that he understood he was being more generous than the law said he had to be but that he still wanted to go ahead with the agreement. He explained some of the reasons why he was taking this approach. We met up and he signed the agreement and I signed the certificate.
Why did I sign the certificate even though David was going against my advice? I did so because the certificate only confirms that I have provided advice to David about the effects and implications of the agreement, not that he has followed that advice. In David’s situation, I was comfortable that:
- I had all the valuation information from him and his former partner that I needed in order to complete my advice to him accurately and properly;
- He had understood my advice;
- He had taken time to make a considered decision, not a rushed one; and
- He was acting freely and not under pressure or duress;
Most importantly, I recognised that the law is only one factor that went into David’s decision about the settlement. Sometimes the law bears little resemblance to the interests or needs of the parties and their family moving into the future. In David’s case, he was squarely focused on not only his interests but also those of his former partner and their young child and came to a settlement that he felt best met those.
When a client says “thanks for the advice, I get it but I want to do something different” I recognise that, like a jigsaw puzzle, there were many pieces to make up their decision and the law was just one piece. My client may have had to weigh up a myriad of other factors:
- the financial cost of continued negotiations or litigation
- the personal and emotional cost of continued negotiations or litigation
- the importance to the client of a positive future co-parenting relationship with the other person
- the desire to move forward
- wanting to do what is perceived to be “morally right”
- a desire to ensure the children are well provided for
- wanting to ensure that the agreement leaves both parties on an equal economic springboard for the future
the list goes on…
If you are concerned about a family law issue, give me or the team at Family Law Results a call to discuss how we may assist you: www.familylawresults.co.nz
I have lost count of the times I have had a prospective client approach me to help with their relationship property division which they are quick to claim is “pretty simple”. Often, the client is correct and the division is straight forward and the parties reach agreement relatively easily. Other times, they are woefully wrong and their relationship property matter is a minefield of legal or negotiation complexities they never envisaged.
Even if your asset base is straight forward and you and your spouse have been able to quickly reach agreement together over coffee, formalising that agreement won’t be as simple as walking into your lawyer’s office together, signing an agreement and walking out again. There are some hoops to jump through.
New Zealand’s relationship property law, the Property (Relationships) Act 1976, sets out some important criteria that need to be met in order for an agreement as to property sharing, whether it be a pre-nuptial agreement or one entered upon separation, to be valid and enforceable. If those criteria are not met, you could later face a claim that the agreement should be set aside or declared void. Merely agreeing on your property division at your kitchen table is unlikely to satisfy these criteria and will leave you vulnerable to future claims.
What are those requirements?
Firstly, your agreement needs to be in writing and needs to be signed by both of you.
Secondly, you and your spouse each need to receive independent legal advice from a lawyer. You cannot use the same lawyer. The lawyers you and your spouse use must be truly independent of one another and cannot work in the same firm. Upon providing you with independent legal advice about the effects and implications of the agreement, your lawyer will sign a certificate within the agreement to confirm the requisite advice has been provided. The agreement can be overturned by a Court if it later decides your lawyer or your spouse’s lawyer has failed to properly and fully advise about the Agreement.
Thirdly, your signature on the agreement must be witnessed by the lawyer who has provided the certificate as to independent legal advice. You cannot receive independent legal advice from your lawyer and then have your next door neighbour witness you signing the agreement.
Of these requirements, it is the need for independent legal advice that usually causes clients the most frustration. While most people seem to readily accept the need to each engage their own lawyer, frustrations can arise around what the lawyer requires in order to properly provide advice about the proposed agreement.
Generally, your lawyer should be advising you about what you could expect to receive if your property is divided in strict accordance with our relationship property laws and about how this differs (or not) from what you stand to receive under the proposed Agreement. I generally like to show this to my client in the form of a calculation that sets out “the bottom line” – what they could expect to receive under the Act and then show them how this compares to a calculation of what they are actually receiving under the Agreement. My client can then make a very real comparison of the two in dollar terms and assess whether he or she wants to proceed with the agreement.
The obligation on lawyers when providing advice about relationship property agreements is an onerous one. In order to provide full and proper advice about an agreement, both lawyers will seek information and disclosure of all the property that each party has an interest in. In a number of cases where agreements have been overturned for lack of sufficient legal advice, the Court has done so because a lawyer hadn’t obtained sufficient valuation information. The Court has been unable to see how the lawyer, in the absence of valuation information, could possibly have been able to advise his or her client about the settlement contained in the agreement and how it measures up against the client’s legal entitlements.
The information and documents you will likely be asked to provide include valuations of all your assets, bank statements (sometimes going back a considerable time period), life insurance and superannuation information, financial statements for any businesses, documents about any family trust, mortgage and credit card statements.
In some situations, gathering and providing the information for your lawyer can meet more than one need. If one of you is borrowing funds to buy the other one out, it is more likely than not that the lending bank or financier will require, as a condition of it lending the money, evidence of the value of the property as well as a properly completed Relationship Property Agreement.
I can well understand the frustration of thinking you’ve reached agreement with your spouse only to discover there are several hoops to jump through in order to finalise that agreement. However, if I am not mistaken, you want your property division sorted, you want certainty about your financial future moving forward and you want to be able to enter into future financial decisions relying on knowing the relationship property agreement is going to endure. To achieve this, it is best to accept the reality of what the law requires, get good advice, don’t give into the temptation to try to take shortcuts and provide what is asked of you quickly. This will minimise delays, keep your costs down and reduce the risk of your Agreement being overturned later.
Need help with a relationship property issue? Find out more about how the team of specialist family lawyers at Family Law Results can assist you at www.familylawresults.co.nz.
