The cost of getting a Separation Agreement (or Contracting Out Agreement for that matter) is not expensive.
Certainly, it is less expensive than going to the Family Court for an order to divide up your relationship property.
If you are in a
de facto relationship, you effectively have the option of an informal
separation through getting a separation agreement which details how you
will each divide your assets. This agreement needs to be certified by two
After that, you may wish to register the separation agreement in the Family Court as a ‘consent order’ so that it becomes legally enforceable.
What if we are married?
But if you are in a marriage, you will need to get a divorce. This is done through an application which depends on whether you both agree to the divorce, or whether only one of you wants to get the divorce.
However, you will then also need a separation agreement detailing how you want to split your relationship property assets. Can’t agree on what is shared relationship property? See our article on what assets are usually deemed to be relationship property.
Above all, note that couples have a time of 12 months from when their marriage is dissolved by a court order to divide up their relationship property.
Variable legal cost of a Separation Agreement
The reason why there are differences in the costs of a separation agreement where you both choose separate lawyers is that this can turn into an adversarial process. Although your lawyer must be independent and act solely on your best interests, this should not be at the expense of an amicable separation where you and your partner have already agreed and decided on the process of splitting your relationship property assets.
The New Zealand
law society has a guide on what you can expect to be charged for legal costs
from our lawyer.
These costs can depend
on the “importance and complexity of the matter, the nature of the work and how
urgent it is, results achieved and the costs of running a practice, and any
quote or estimate given, or fee agreement made at the outset”.
CODR does not have any disbursements as the entire process of certification is online.
Cost of the separation agreement (alone)
CODR enables you
both to agree to terms which suit you and then to get this agreement drafted
with the aid of an automation ‘bot’ via Autom.io.
These bots ask you questions relating to your situation and puts the details
you input into the agreement. You will then be able to download a Word document
to edit if you have any changes to make on the final copy.
This takes out lawyers
in the negotiation process which means it is both cheaper and perhaps a better
way to preserve the relationship you have with your partner as no lawyers are
involved to make the process tense.
However, if you
were to get an agreement drafted by lawyers, there could be additional costs as
each of your respective lawyers send the agreement back and forth with
suggested edits or additions of clauses.
Agreement only costs $345 online and this fee is payable directly on our
However, the cost of a legally binding Separation Agreement relates mainly to the certification costs of getting lawyers to independently provide advice as to signing the agreement.
After the cost of a separation agreement, is there a cost a ‘consent order’?
currently costs $220 to the Family Court in order to make the agreement an enforceable
order. If both of you entered into this willingly, it is likely to be made
into a consent order.
However, it does
note that you can ask the Court to You can ask the Court to cancel the fee and
will usually be waivered where applicants qualify for legal aid. It is unclear
whether the Court would also waiver the fee if you are a higher net-worth
Furthermore, the benefits of going further to get a consent order after you have completed certification of the separation agreement is that it becomes enforceable by the court and if one of you doesn’t do what was agreed in the Separation Agreement, the Family Court can make the person pay a bond or compensation.
On the justice website, it notes that “if the person still doesn’t follow the Order, then they may get charged with a crime and could be fined or jailed.”
Moreover, this can add greater protection to you than just getting the Separation Agreement on its own.
Although this is legally valid and binding, the other party not complying may mean that you are left out of pocket to try to enforce this through the Family Court or mediation.
Therefore, if you have a doubt as to whether your partner will follow through with the separation agreement terms, get a consent order!
A comparison of costs when you must mediate
In the event in
which you cannot get a separation agreement, because you and your partner or
spouse disagree on the terms of the separation agreement, there is also the
option of going to mediation. Note that this is different to a Family Disputes
Resolution, which is a process that is Court-mandated if you choose to go to
the Family Court.
Mediation is an
option for couples who have separated but cannot agree as to their terms.
The following is
an example of one of the disputes we have dealt with at CODR, and a comparison
of the likely court costs in a similar case:
30-50k per party
95 working days
Approx. 24 months
Less than $10,000.00
While this is not
was not in regard to a separation and relationship property issue, this does show
that CODR’s online process can help to expediate getting a finalized and
binding separation agreement.
Cost of a Separation Agreement with CODR?
It’s a fact of life that every couple and their agreement is going to be different.
However, CODR strives to provide our clients with a fixed fee. This does mean that we need to estimate and negotiate any fixed fees with our lawyer’s prior certification.
We price this based
on our experience of the complexity (on a sliding scale from standard to complex)
of your situation and agreement terms.
certifications where couples have one stand-alone Family Home which are splitting
the sale of proceeds from, we usually charge $1500 plus GST.
does not include situations where couples have complex arrangements dealing
with the Family Home, or if couples have multiple properties or trusts, or
business shares. There is a myriad of situations in which CODR’s standard agreement
does not take into account. Therefore, a good indication that your situation is
more complex than our standard situations will be whether you have needed to
edit or add in clauses to your Separation Agreement.
the costs of certification as our lawyers bill us for the time in which it takes
them to prepare and then to conduct the certification – taking into account the
legal advice they must give as part of the process. More complex assets or situations
does mean more time needed in order to provide advice and to satisfactorily
certify your separation agreement.
What can I expect to pay?
Most of our more
complicated certifications for the Separation Agreement vary between $1500 – $2500
+ GST, as an indication.
However, if for any reason your certification does not occur (one partner changes their mind last minute, or our lawyers advise the party not to sign as the terms are manifestly unfair), then CODR refunds the parties the fee paid less any costs already and reasonably incurred by our lawyers in preparing for and conducting the certification.
Can I get competing quotes from our own lawyers?
Yes. CODR does not have the exclusive right to certify your agreement and any party can use their own lawyers to certify. In other words, we think we provide a transparent fee and process in certifying.
Are there any on-going costs after separation?
You may need to get conveyancing or trust lawyers involved at this stage to deal with the execution of the terms of the separation agreement. For instance, you may need to change the name of the title on the property to one spouse, or you may need to get Deeds of Settlement drafted up if you have independent trustees which deal with your relationship property.
However, there are on-going costs that may arise out of your separation. For example, if you have children, you may have already detailed in your agreement how you will each contribute to child-care. In particular, child support becomes a topic of on-going costs.
child support, if your separation agreement deals with on-going maintenance
where one party continues to support the other, these may also be the on-going costs
involved. This could be in addition to any child support payable. It is also
open to a spouse to apply to the Family Court for maintenance on top of child
support so it is best to discuss this issue when you are getting the agreement.
What to do with your finances after you have
have a guide on separation. This details a good step-by-step guide as to what
you need to do in order to get your finances in order including:
up new bank account
your Credit Record and any debts are paid.
any rental agreements
out your net worth
a new budget after adjusting to a change in income
In addition, it is important that if you have any joint debts that you might want to ensure your name is not on these after you have paid off your share (or whatever the case may be).
Similarly, before signing onto a new lease, to take your name off a shared lease, else you could be jointly liable for your partner’s debts or if anything goes wrong on this rental property.
Does CODR accept Legal Aid applicants?
Unfortunately, CODR does not currently provide legal aid services for separation agreements or certifications for couples which fall within the legal aid system.
However, it may be in your best interest to head to a local Community Law Centre. They are likely to have a directory of services or lawyers who are skilled in this area to help.
whether they can provide services to you here and if
you are eligible, they will direct you to the right Legal Aid lawyer.
When you separate, your relationship property assets are equally divided.
This is in the Property (Relationships) Act 1976 (“The Act”). To familiarise yourself with the fundamentals of the Act, refer to our article here
S 11 of the Act states that each spouse is entitled to equal shares in the:
Family Chattels (e.g. furniture, boat, and dog)
And any other classified relationship property
The above would apply if you have no contracting out or separation agreement. However, there are exemptions to the equal division assumption, such as:
Extraordinary circumstances that make equal sharing “repugnant to justice”;
A short marriage;
A short de facto relationship;
Economic disparity between the spouse after separation;
Two homes that qualify as the family home;
One spouse sustained or diminished the value of another spouse’s separate property; and
One spouse satisfied personal debts out of relationship property.
The Courts may find that equal sharing would create extreme injustice.
In cases like these, the courts will divide relationship property according to the contributions made by each spouse.
Here are some examples of extraordinary circumstances that are “repugnant to justice”:
Wife financially and emotionally supported the family and the husband was an alcoholic;
Wife financially supported and provided everything in the marriage, took care of the child and provided the funds for her husband for further studies. His earning capacity was greatly enhanced during this relationship as she was more established.
Factors that courts will consider when assessing exceptions
Was there a gross disparity of
contributions during the relationship
The length of the relationship.
The general rule is, the longer the relationship has been the more intermingled
Was there any negative
contribution such as one spouse acting in fraud, deceit or forgery towards
Gross misconduct of a spouse.
This could include someone who is very abusive and they damaged the property in
Factors courts will not consider
The circumstances after the spouses cease to live together. For example, if one spouse after separation assumes the responsibility of maintaining the house and paying for its outgoings. Or if one spouse deserts the family and fails to maintain for them
If one party owns the family home, this is not “extraordinary”.
Marriages of short duration
This is when spouses have lived together for less than three years. The division of property would be to each spouse’s contributions to the marriage if the assets were:
Wholly owned or substantially by one partner; or
Assets owned by one spouse through succession, survivorship, as a beneficiary, or as a gift; or
One spouse contributed to the marriage disproportionately than the other.
Any other property or assets that fall outside of the above will be dealt with by the equal division rule.
De Facto Relationships of Short Duration
If there has been a de facto relationship of short duration where the de facto partners have lived together for less than three years or the court deems it to be a de facto relationship of short duration, then the Act will not apply. The exception to this would be if:
There is a child in the de facto relationship
One spouse has made a significant contribution to the de facto relationship
Each share will be determined according to individual contributions.
This section applies if the courts decide:
After the relationship ends, the income of one spouse is likely to be higher; or
One spouse was better off due to their role during the relationship.
Factors that courts may have regard to when
drawing this conclusion:
The likely earning capacity of each spouse
The responsibilities of each spouse for the ongoing care of children
Projected earnings of one spouse if they had scarified a career for the relationship
The enhanced earning capacity of one spouse because of their respective roles in the relationship
The age of each spouse
homes at the date when marriage or de facto relationship began
This applies during a relationship when each spouse owns a home that could be the family home. The courts will adjust the shares to relationship property to compensate for the inclusion of the home of only 1 spouse. This resolves any injustice that may have resulted.
As a result, this section is usually relevant for second marriages or ones that occur later in life where each spouse may own thier own house.
Sustained or diminished value of separate property
Sustenance is when one spouse’s property has been maintained by relationship property.
Large amounts of cases under this exception are related to farms. An example is where one spouse owns a farm that is separate property, but the non-owning spouse maintains the farm.
A Court will award compensation or displace equal sharing for this. But calculations in the past for this has been quite conservative.
Diminution is where separate property has been “materially diminished” in value by the one spouse’s actions. Courts may decide to diminish the shares of the other spouse as compensation.
Personal Debt satisfied out of Relationship Property
If one spouse satisfies their debts from the relationship property, the other may be compensated either by:
A greater share in relationship property; or
Some of the other spouse’s separate property is treated as relationship property; or
An order for one spouse to pay the other.
Talk to one of the CODR team today to see whether your situation fits one of the above.
What are trusts and how do they apply to relationship property?
Firstly, even if you established the Trust, but your partner contributed to the assets, the Trust will not necessarily be separate property. This is true even if a third party established the Trust.
To clarify, this means that Trusts are not an absolute protection against relationship property. This will be determined using the standard test in relationship property laws.
Certainly a partner will have no interest in a trust unless you are a beneficiary of the trust or the trustees have given you a legal interest in the trust.
In other words, if you and or your partner have a vested or contingent interest in a trust, that interest will be sufficient to qualify as property under relationship property laws.
Relationship property laws make provision for some possible claims by the non-owning partner against these interests. So even if a distribution is classified as being your separate property, this may not necessarily protect you from claims.
If you are unsure whether you or your partner has a legal interest in the trust, talk to a lawyer. Alternatively, contact CODR and we may be able to help.
How does the current law deal with trusts?
At the moment, it is clear that simply owning assets in a trust is not an absolute bar from claims. However, if a trust is involved the Family Court has limited jurisdiction, and can refer matters to the High Court. But this can be an expensive and time-consuming process.
The law expressly allows for the trust-owned house to be included in some situations, such as:
If the house was transferred to the trust when the couple were in a relationship;
Even if the property was already in a family trust before the relationship commenced, if a loan is secured over the property and a partner made repayments;
If one party contributed to the “improvement” of the home, then they may have an ability to claim against the trust.
In addition, there may be other situations in which a Trust does not separate your property from relationship property.
What is changing?
In 2019, the Law Commission will suggest reforms
to the relationship property laws in New Zealand which have not changed for
over 40 years. In terms of trust, this may include allowing the Court to have
wider powers with regard to the sharing of trust property.
Therefore, before entering into a relationship, entering into a relationship property agreement recording the manner in which you seek to have your property divided in the event of separation, will be important.
The Property Relationships Act (the ‘Act’) allows couples to “opt out” of the “normal rules”. These rules detail how the Family Court might divvy up your shared relationship property. Do this through a contracting out agreement.
By making an agreement, you and your partner can govern who owns what and how you will divide up relationship property. This is instead of the rules which normally apply under the Act on a separation or divorce.
This is for couples or parties intending to enter into a relationship, whom have assets which may be relationship property. Remember – your agreement will not work (it won’t be legally binding) if you do it yourself!
If you are already in a relationship and looking to separate, ore information about separation agreements can be found here.
How might the Court split our relationship property?
A Court will try to balance the division of property between couples. the Court recognises that there might be unequal bargaining power between couples and so there needs to be a just way of dividing up relationship property. The Act encourages couples to decide freely. This means you both choose how you want to separate property if your relationship ends.
When can I create a contracting out agreement?
Usually couples will get a contracting out agreement when they are newly in a relationship, thinking about getting into a relationship or before marriage or living together.
As with most things, it’s best to get one as early as possible if you think you will need it. This could avoid awkward conversations or potentially expensive proceedings later down the track.
How do I get a contracting out agreement?
You will need an agreement in writing that is certified, signed by both parties and their independent lawyers following independent advice on the agreement terms.
What are some issues to be prepared for?
Firstly, ensure that your partner is willing to agree to get a contracting out agreement. As this process is voluntary, both parties must be committed.
The usual issue with contracting out agreements is that one party may be stopped from giving away their rights without knowing the consequences of signing the agreement or what they are entitled to under the Act. It does this through a certification system.
This means that independent lawyers must provide you with advice as to whether to sign the agreement or not, or put forward better terms for you. There is a higher risk changes to your contracting out agreement will be made if your agreement does not appear to be fair. Fair doesn’t necessarily mean 50/50 but it does need to show that it is not a “serious injustice”.
How do I make sure our contracting out agreement is fair?
The Act also attempts to prevent a partner from entering an agreement when the other partner is bullying them into it.
A court can, even if an agreement satisfies the criteria under the Act, still set aside an agreement if, having regard to all the circumstances, it is satisfied that giving effect to the agreement would cause serious injustice. There are a few factors a Court will look at which will be important to consider in your agreement:
whether the agreement was unfair or unreasonable in light of all the circumstances at the time it was made;
whether the agreement has become unfair or unreasonable in the light of any changes in circumstances since it was made (whether or not those changes were foreseen by the parties);
the fact that the parties wished to achieve certainty as to the status, ownership, and division of property by entering the agreement and of course any other matters that the court considers relevant.
The best way to ensure your agreement is fair might be by asking a trusted person. You can run this past close family or friends to see what they think of your agreement terms. Use common sense here to save yourself hassle down the road if lawyers disagree!
I brought ‘x’ into our relationship. When does our separate property become relationship property?
Each party will have to define what assets could be classified as ‘separate property‘ and what property could be classified as ‘relationship property‘. The Courts will recognise if the non-owning partner contributes to any increase in value of the other partner’s separate property. This increase is deemed ‘relationship property’ and thus equally shared.
Note that this may well include indirect contributions too.
Contributions do not have to be financial ones. Looking after the family home or children can be deemed a contributing factor. The Courts will take this into account when determining division of property.
When should we update our agreement?
Your agreement will not last for an eternity. It won’t cover all future assets that you acquire throughout your relationship which might be considered relationship property. The longer you leave an old contracting out agreement, the higher your risk. It is safe to update your agreement when your circumstances change. This might be after a particular event or every couple of years.
We are heading into a new relationship. What if we start a family?
That is great! But children can add complexity to your agreement – not to mention relationship! This means this is a factor to consider if you see the potential or are trying to start a family together. Our lawyers will advise you on this. It will likely mean that additional clauses will need to be drafted into your agreement. This is to take into account what happens if one partner has to take time off to take care of children later on.
We have agreed on what’s mine etc., what next?
You will need this contracting out agreement certified by a lawyer. CODR provides this service as a package so that it is easy for you and your partner to get this done if you use our agreement. We strive to make this process as simple, stress-free and predictable as possible. We provide one affordable fee. However, our lawyers are independent. This means they will have your best interests in mind.
Our situation is complex. Where do we go to for help?
CODR always does a preliminary assessment as to whether a contracting our agreement suits your situation. We also have the option of our lawyers providing you with tailored legal advice. Please enquire with us. We will see how we can help. If not, we may be able to direct you elsewhere.
This question is frequently asked by couples, wondering whether they should get a prenup agreement. Depending on your situation, we think this is a good idea.
Recently this was the topic of a NZ Herald article, showing more and more couples consider this normal.
First of all, a prenup enables partners to ‘contract out’ of the equal sharing of relationship property under the Act.
The broad definition of what makes up ‘relationship property’ means you could be sharing your assets with your long-term partner.
Assets which you have brought solely could be relationship property. This is might be a house which only you owned before the relationship started.
This could put your financial situation in jeopardy. That is, assuming you do not intend to share your assets with your partner. No doubt if you want to keep your assets which you brought into the relationship separate, you should get a ‘prenup’.
When should you get a prenup?
The Property (Relationships) Act 1976 applies once the parties have been in a qualifying relationship.
These are usually a marriage, a civil union or de facto partnership for 3 years. A qualifying relationship under the Act has its own definition.
Factors for a qualifying relationship might include:
How long you have been in relationship;
How financially dependent you may be on each other;
The ownership and use of shared property;
The degree of mutual commitment to a shared life or
The reputation and public nature of the relationship.
These factors are only examples.
Am I in a “de facto relationship”?
The Act almost definitely applies if a couple have been living together for 3 years. But it might not be necessary to have lived together for this long or to have shared finances to be deemed a couple.
Most noteworthy, in the case of Scragg v Scott  NZFLR 1076, the parties only lived together for short periods of time because of Mr. Scragg’s overseas work.
Therefore no continuous joint living period occurred of more than nine months. The Judge described their living arrangement as a de facto relationship under the Act.
This was on a broader consideration of the nature of a relationship contained under section 2D of Act. The Judge considered the mental aspect described as “a commitment to a continuing future relationship.”
What if you live separate from your partner?
If you live in separate houses and don’t share finances you might still be in a “de facto relationship”.
Similarly, the High Court in Moon v Public Trust and Anor  NZHC 1169 expanded the scope of the definition of “de facto relationship”.
Although the parties had lived in their own separate homes, it was still considered a de facto relationship.
In addition, the couple shared few common household possessions for the entire 27 years of their relationship. But Justice Powell did not view the lack of common physical assets as going against a relationship.
Instead, the deceased’s health, and the plaintiff’s home-based business made it unreasonable to expect shared living arrangements.
When should you get a prenup agreement if you are in a de facto relationship?
Certainly, CODR recommends getting a prenup agreement within the first 3 years of the relationship.
The longer you leave it, the greater the risk, the harder the conversation – and the more expensive it could eventually be.