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Introduction: the Separation Agreement

If you are separating out of a marriage or de-facto relationship, or getting a divorce, you should consider getting a separation agreement.  Other than Court, it is the only valid way of dividing relationship property once a relationship ends.   Some people do this process informally, however, this can result in arguments and Court down the line.

But going to court can be very costly. While the relationship is still on good terms, you might want to negotiate a separation agreement.

You might like to refresh your knowledge of what Relationship Property means before you continue reading this article. Essentially, your separation agreement allows you to dictate how your assets will be divided.  If you get a valid separation agreement, this will override the provisions of the Property (Relationships) Act 1976. But in order for it to be legally binding on both parties, the Separation Agreement must be:

  • In writing;
  • Signed by both parties;
  • Following independent legal advice; and
  • A lawyer has to sign and witnesses your signing. This lawyer also certifies that they explained the effect and implications of the agreement to you.
  • Similarly, your partner will also need an independent lawyer doing the same certification.

What you can expect in our Separation Agreement ‘template’:

Our CODR separation agreement includes aspects such as:

  • The date on which you agreed to separate
  • The maintenance of one spouse or partner by the other if appropriate
  • Arrangements for day-to-day care of or contact with children of the relationship
  • Debts or other hire-purchase collateral owned under both names
  • The Family home
  • Dividing up personal property

 

Things to include in your Separation Agreement

If you are married or in a civil union with your partner and you later decide to apply for a divorce, you can also use the separation agreement as evidence that you have been apart for 2 years. It is necessary to show that you’ve lived apart for two years before you can apply for a divorce.

Before you go ahead and purchase CODR’s Separation Agreement, here are some key things most couples think about when they get a separation agreement.

The Family Home

One of the main assets couples own is the home. You could also have jointly-owned chattels. Think about your family car, household furniture and other ‘big ticket’ items.

Regardless of who paid for the Family Home, it will usually be relationship property.

When you separate, you can sell the main Family Home. The sale will be divided in half and shared between you and your partner. Otherwise, one party may keep the house and buy the other  partner out. This might be desirable if you have children to consider.

In the Family Court, the judge guides their decision by general principles. You might like to think about these principles when dividing your own relationship property:

  • That since each partner has contributed equally to the relationship, the assets will be shared equally too i.e. split in half
  • The Court won’t look at who is ‘at fault’ for breaking up the relationship
  • Unpaid domestic work has equal value to economic work

However, your separation agreement does not have to divide your assets in this way. If you are purchasing a separation agreement and then seeking your partner’s approval, you can show them that you have thought about fair terms.

What about Separate Property?

But you and your partner may also have other assets which are not relationship property.

An example is other investment home(s) which are not the Family Home. This could be ‘separate property’ which does not come under the Relationship Property Act if it can be determined to not be relationship property. Separate property remains the property of the partner who owns it.

Situations can get complicated. For example, sometimes both partners own a home capable of becoming the family home. Generally, when relationship property is to be divided, the home of only one partner will be considered the main Family Home.

Separate property can include property one partner got while they were not living together as a couple. Or it can be property that a partner acquires from another such as an inheritance (unless this property gets mixed with relationship property). If you need legal advice on your individual circumstances, CODR can help you find Family Law experts.

Child-Care Arrangements

If you have children from your relationship to consider, our Separation Agreement, does allow you to detail what your day to day care and contact of your children will be, access and other major decisions regarding the upbringing of your child or children if they are still minors.

The court will only be concerned only with what is in the best interests of the children when they consider child-care arrangements.

Your own or your partner’s debt

You or your partner can be liable for any personal debts (even if they are solely in your partner’s name) if they are considered relationship debts. Relationship debt includes any joint debts or debt that is solely in your partner’s name if:

  • the debt was related to the relationship property. For example you used it to get a loan on a car you both used, or for a business you both benefited from;
  • the debt was for the benefit of both partners. For example rent, debt to buy furniture;
  • the debt is the result of the cost of bringing up any children you have together.

You can deal with how to divide up any joint debts or whether one party takes these debts over and provides an indemnity for that party not taking over the debt.

Think about your current credit card debts, any remaining hire purchases, student loans etc.  Your lawyer will ask for more information if there is not enough details in your separation agreement. We recommend you spend some time listing these out with your partner.

What about Kiwisaver?

If you have contributed to Kiwisaver after your relationship started, or another employment scheme such as the Police Superannuation or other government scheme, then you need to share this amount with your partner when you separate.

Generally, this will be split in half. Your certifying lawyer will need to see proof of the value of your Kiwisaver – unless it is only a small amount.

You can withdraw your Kiwisaver on the grounds of significant financial hardship and serious illness. Your Kiwisaver scheme manager will need to be reasonably satisfied that you or your partner is suffering or is likely to suffer significant financial hardship. Then you can make a significant financial hardship withdrawal. Significant financial hardship includes significant financial difficulties which can come up after separation.

Finally, is your agreement fair?

If you do have to go to court, it is likely that the judge will determine whether:

  • the agreement is fair;
  • you both worked on the agreement without pressure and entered into it freely;
  • it covers all your assets after full disclosure.

The extent to which a judge will stay with your agreement reflects the level of his acceptance of the above three points.

If one of you is in breach of the deed of separation and the other goes to court to enforce it, the judge can alter the terms of the agreement.

A separation agreement is useful in so many ways. It allows for certainty, it ensures your separate property stays your separate property, and probably most importantly, it helps to give parties closure.  

Buy your Separation Agreement Now

People are increasingly turning online to meet their everyday needs. Technology can make this a more satisfying, efficient and easier process. This is exactly the aim of CODR, an online dispute resolution platform and service.

CODR offers the following ‘DIY’ services and steps so that you can move on:

  1. Purchase our agreement. It will automatically generate your tailor-made agreement.
  2. Contact us to certify your document with our expert Family Lawyers.
  3. Go ahead and put the terms of your agreement into action if needed.

Things such as Family Trusts and businesses can make your situation more complicated.  Please talk to one of us at the CODR team about your situation.

If you have a dispute over relationship property, CODR can also help you resolve this if both parties are willing to negotiate or arbitrate. Otherwise you can consider what your options are with our Family Law experts. Please contact us on what your next steps may be.

 

Disclaimer: Any information we provide is general information. Please do not rely on the contents of this article as legal advice. CODR is not a law firm or a substitute for a law firm.