Separating is difficult. The process involved in reaching an agreement about the division of your relationship property can then take some time to work through, depending on the circumstances of your situation.
At Lucas and Lucas, we can help you with the formal process of dividing your relationship property.
Firstly, think about all of the items (assets & liabilities/debts) which you and your partner have accumulated during your time together.
The starting point from a statutory framework, and legal basis, is that relationship property is divided on a 50/50 split, unless the parties reach an agreement otherwise. Different assets and/or debts can be set off against one-another on a valuation basis to achieve the equal division on a dollar basis. This may involve one party making a lump-sum “adjustment” payment to the other at the conclusion, or settlement, of an Agreement.
A written agreement about how your relationship property is divided provides certainty going forward, and defines those assets which will be your separate property. The agreement will also set how debts may be repaid and/or a compensatory adjustment payment.
The following list is a general example of the main items couples may own together:
- Family Home (valuation or ‘agreed property value’)
- Mortgage/loan amount still owing on property
- A business which one or both parties may own and/or operate – this may involve
i. Limited liability company –
ii. Shares owned by partners
iv. Sole trader business
- Valuation for family vehicles
- Personal chattels & household items
- Other ‘vehicles’ – boats, caravan, motorbikes, etc.
- Kiwisaver amounts
- Investments (i.e shares)
- Other lump sum cash pay-outs
- Personal savings
- Joint bank accounts and/or separate bank accounts
- Credit cards
i. Personal names and/or
ii. Joint CC
- Other debts e.g higher purchase, laybuys etc.
Generally speaking, a schedule of your assets and the values given to these are balanced against a deduction for the debts owed. The difference between the two is your ‘Equity’ and the statutory entitlement is for to this to be equally divided. However, there can be exceptions to this and there may be special circumstances which permit entitlements or compensatory payments for eligible parties.
If you are considering a separation, require independent advice, or have any questions about the next steps to formalise an arrangement, call us on 03 477 8080.