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The Property (Relationships) Act
The Act applies to married spouses and to partners who are in a civil union or a de facto relationship.
Relationship of Short Duration
The Act distinguishes between a relationship which has been in existence for less than three years, and which is usually termed a relationship of short duration, and those that have lasted for a longer period. In some cases a relationship that has lasted less than three years may be considered not to be a relationship of short duration for example if there is a child of the relationship o if taking all circumstances into account it is appropriate that the relationship is considered not to be of short duration.
In the case of a relationship of short duration each party would usually take the assets from the relationship that they brought in.
In the case of a relationship that is not of short duration, there is a strong presumption that the parties will share equally in the family home and relationship chattels. That is unless the court considers that there are “extraordinary circumstances … that make equal sharing repugnant to justice”, which is a strong test to satisfy.
Inheritances, distributions from a trust and gifts are likely to be considered the separate property of the party who received the gift, distribution or inheritance. In this case they are the property of that person and not subject to division under the Act. That is unless the gift, distribution or inheritance has become intermingled with relationship assets or used in the relationship with the express or implied consent of the party who received it.
Relationship Ending on Death
If one partner dies they have a choice as to whether to make a claim under the Act or to take under the partner’s Will or if there is not Will under the intestacy of the partner (in New Zealand this will be determined by s 77 of the Administration Act 1969. There are time limits for the choice to be exercised.
Relationship Property (Contracting Out) Agreements
These may be entered into for the purposes of settling differences between partners after a break down in the relationship.
They may also be entered into prior or during the parties’ relationship for the purpose of determining the distribution of assets at the end of the relationship, upon separation or upon death or for estate planning purposes.
There are certain statutory requirements for a Property Relationship Agreement to be binding, without these the agreement cannot be enforced. These include a certificate from the New Zealand registered lawyer witnessing your signature that you have been properly advised of your rights and obligations under the Act.
A court may set an agreement aside if having regard to all the circumstances, the court is satisfied that giving effect to the agreement would cause serious injustice, or if the agreement is considered void, voidable, or unenforceable on any other ground.
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