CAB – Separation and relationship property

Many separating couples don’t have dependent children, but most do have some level of shared or joint “relationship property.” This article outlines what relationship property is, what may qualify as separate property, and how partners can agree on dividing what they own.

If you are married or have been in a relationship for more than three years, almost all assets owned by either partner including those brought into the relationship are generally treated as jointly-owned “relationship property”. Under the Property (Relationships) Act, the starting point when a relationship ends is that all relationship property (assets and debts) is divided 50:50.

Relationship property includes all shared assets and any shared debts. Assets may be tangible or intangible, such as a home, vehicles, furniture and chattels, savings accounts, shares, investments, superannuation, and each partner’s KiwiSaver balance. Business interests are also included. Shared debts may include a mortgage, bank or retail credit cards, Buy Now Pay Later balances, and other loans. Search: What is relationship property, and what is separate property? on our website.

Separate property is property that has not been used for the benefit of the relationship, has been kept entirely separate, and has not become mingled with relationship property. Partners who want to keep certain assets separate should make this clear at the beginning of the relationship and sign a contracting out agreement (commonly known as a “prenup”). Search: What is the difference between a separation and a pre-nuptial agreement and can my partner and I make our own?. on our website.

Gifts (including cash) and inheritances are usually considered separate property, but only if they have been kept separate and not mixed with relationship property. If a gift or inheritance is used to repay a joint mortgage or pay for renovations on a shared home, it becomes part of the relationship property pool.

Ideally, partners will agree on a fair and practical 50:50 division. However, even if both partners agree, the agreement is not legally binding unless each partner receives independent legal advice. Each partner’s lawyer must review and countersign the agreement to confirm it is fair, meets legal requirements, and protects both partners from pressure or exploitation.

If partners cannot agree, either may apply to the Family Court. The court will usually order an equal division unless this would be extremely unfair. Unequal division may be considered if one partner is left at a significant economic disadvantage – for example, where one partner paused their career to care for children while the other continued working and advancing professionally. Search: How will our property be divided if our relationship ends? on our website.

For more information and advice: Visit CAB Hibiscus Coast or phone 09 426 5338 (Mon-Fri, 9.30am-3.30pm), or contact a family law specialist.