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 independent lawyers.
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. CODR’s Separation Agreement only costs $172.50 online and this fee is payable directly on our website.
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’?
Yes. It 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 individual.
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:
|Legal Fees||$0||30-50k per party|
|Time Taken||95 working days||Approx. 24 months|
|Total Cost||Less than $10,000.00||Approx. $100,000.00|
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. For standard certifications where couples have one stand-alone Family Home which are splitting the sale of proceeds from, we usually charge $1500 plus GST.
However, this 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.
This increases 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.
Aside from 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 separated
Sorted.org.nz 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:
- Set up new bank account
- Check your Credit Record and any debts are paid.
- Update any rental agreements
- Work out your net worth
- Create 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. They detail whether they can provide services to you here and if you are eligible, they will direct you to the right Legal Aid lawyer.
Another useful resource is the Citizens Advice Bureau which answers some questions relating to separations and divorces here. In short, although the cost of a separation agreement is never fixed, this article may be a definitive guide on what costs you should expect when separating.