Protecting Assets – Albany Relationship Property Lawyers
When couples separate, they want to divide their assets. In New Zealand the law says that jointly owned, generated, or accumulated assets should be split equally. This can often give rise to distress and disappointment for one or both parties. Talking to one of the Albany relationship property lawyers before you settle into a new union can save a lot of hassle if things fall apart years later.
What is Relationship Property?
Relationship property relates to assets acquired during the length of a union.
Where people get confused is in their interpretation of the acquired part.
A common issue if is one partner owns a house before the start of the relationship. They assume that it will be theirs when that relationship ends. That is not the case.
The other partner is entitled to half of the increase in value of the house during that period.
The same argument is true for any other assets held before the beginning of the relationship such as shares or precious metals.
Other times, one partner may think that they are entitled to a bigger portion of the total assets because they earned more than the other one. Again, this is not correct.
Under the Relationship Property Act, all income, assets, and financial gains during the length of that union are considered to be equally owned. The amount that one side contributed is not relevant.
Debt is also assumed to be equally owned. If one party has run up bug credit card debts, the total amount is generally included in the calculation of the nett relationship assets.
It is easy to see why there is confusion about dividing relationship property.
How Do You Protect Your Assets?
If you go into a relationship with assets such as a house, you might want to protect them in case the marriage falls apart in later years.
You can do this by using a variety of tools. Many are very similar and are different names for much the same thing.
Separation agreements, Section 21 agreements, or pre-nups. These all perform similar functions.
Your asset or existing property is noted in the agreement. The pre-nup will say that you own the house and that should there be a divorce, then you will retain ownership of that. Sometimes the agreement will allow for a split of the gain in value, other times, the asset will be excluded completely.
If the increase in value is to be shared, then you will need a valuation at the start of the relationship, or when the agreement comes into force.
Why Protect Your Assets
You will probably have worked hard to be able to buy your home. It is natural to want to retain that going forward.
You will also be giving yourself a better start in a new life if your new relationship ends. Separation is usually expensive for both sides. If you have an asset that is protected from the other partner, then you will be further ahead financially.
There may also be a family asset held for generations. This might be a home, some land, or even a piece of jewellery. Wanting to keep those in your family for future generations is a common desire. If these are not included in a prenup, then they can become part of the joint relationship property and will go into the pot to be divided.
When To Get A Section 21 Agreement
At the start of a new romance, no one expects to separate. Life will be glorious from now on.
That is in fact the best time to agree on how assets will be divided, or protected i.e., when both sides are happy with each other. If a separation comes about, it is rare that both partners will be willing to give and concede to the other side.
Albany Relationship Property Lawyers
McVeagh Fleming has specialist relationship property lawyers in their office n Albany on the North Shore. You can find out more from their website. mcveaghfleming.co.nz.