With the evolving time, the separation between partners is on the rise in New Zealand due to social, economic and cultural factors. In this regard, the division of property upon separation has been a matter of immense concern. The Property (Relationships) Act governs such issues within New Zealand. The core issue relates to the division of inherited property and the relationship property.
Inherited Property:
Inherited property refers to the property which is inherited by a person through his deceased parents and could also be a gift from parents to their child. Such property is the exclusive property of the child.
Relationship property:
Relationship property relates to both the partners into a relationship and does not belong to any one of them. Having said that, the relationship property is equally divided among the partners in case of separation as per the current New Zealand laws.
Is Inherited Property also Divided Equally in Case of Separation?
As mentioned above, New Zealand law keeps the relationship property and inherited property distinct from each other in case of separation. However, the law provides a rule which is to be applied on division of inherited property in case of separation. This rule entails that the inherited property can only be divided in case of separation if the same is used for the benefit of the couple. For instance, if a couple is living together in an apartment which is exclusively their relationship property, then one of them inherits property from his/her parents and uses that to furnish their apartment in which they are already residing, such amount incurred on the relationship property becomes the part and parcel of that and upon separation, the entire relationship property including the inherited amount used in there, shall be divided equally between the partners.
EXCEPTIONS
Since the New Zealand laws are explicit and manifestly clear about the division of property in case of separation, there are still some exceptions which on a person can rely to keep the inherited property as his sole ownership. Exceptions include:
- The couple should enter into an Agreement, thereby explicitly agreeing that any inherited property of either of the partners shall remain his exclusive property, be the same used for the benefit of the relationship property.
- If the inherited property be used as a loan from one partner to another or to the relationship property. For example, if the inherited amount is used for the benefit of the couple, but since that amount is a loan to the couple, hence, in the case of separation, the same would be returned back to the partner who has inherited it and the rest of the relationship property would be divided equally between the partners.
Assistance Required?
Fortune Manning has such lawyers/solicitors who have astounding experiences while dealing with the property issues in New Zealand. We aim to provide our clients a clear advise on such rules so they may deal with the situation accordingly and already have a clear understanding of what is theirs and what is not theirs and under what circumstances.
For free consultation, please contact us via Toll free phone: 0800 436 529 or Phone:+64 9 915 2401.
