For­mal sep­a­ra­tion agree­ments are vi­tal

Kapi-Mana News - - OUT & ABOUT - ALAN KNOWSLEY

Le­gal Mat­ters One hus­band left the re­la­tion­ship and fam­ily home by leav­ing a note that in­cluded the words, ‘I’ve taken the car and some clothes. The rest is all yours’.

Sep­a­rated cou­ples who at­tempt to di­vide their prop­erty be­tween them­selves with­out the law­fully re­quired in­de­pen­dent le­gal ad­vice are fail­ing to cre­ate valid agree­ments.

This can have dis­as­trous con­se­quences as in a case where the hus­band ap­plied to the court to di­vide the cou­ple’s prop­erty 20 years af­ter he left the re­la­tion­ship.

He had left the re­la­tion­ship and fam­ily home by leav­ing a note that in­cluded the words, ‘‘I’ve taken the car and some clothes. The rest is all yours’’.

The wife re­tained all the as­sets and the care of the cou­ple’s four chil­dren. The hus­band and wife had no con­tact for 20 years un­til the hus­band got in touch seek­ing his share of the fam­ily home.

The Court in this case held that, de­spite the note and the length of time that had passed, there was no valid agree­ment as to the di­vi­sion of the cou­ple’s prop­erty.

The hus­band was there­fore en­ti­tled to a share in the fam­ily home. That re­sult would cause ma­jor prob­lems for the other spouse, who had based her life de­ci­sions on own­ing the fam­ily home for all those years.

In or­der to en­sure your agree­ment on the di­vi­sion of prop­erty is valid, it must meet the fol­low­ing re­quire­ments:

It must be in writ­ing and signed by both par­ties.

Each party to the agree­ment must have in­de­pen­dent le­gal ad­vice be­fore sign­ing it.

The sig­na­ture of each party to the agree­ment must be wit­nessed by a lawyer.

The lawyer who wit­nesses the sig­na­ture of a party must cer­tify that, be­fore that party signs the agree­ment, the lawyer ex­plained to that party the ef­fect and im­pli­ca­tions of it.

The pur­pose of th­ese re­quire­ments is to en­sure that both par­ties know what they are gain­ing and/or los­ing by agree­ing to a set­tle­ment that di­vides their prop­erty.

So long as they get that ad­vice and the for­mal re­quire­ments are met then the par­ties are free to di­vide their prop­erty on any ba­sis they agree to.

Be­fore the lawyer can cer­tify the agree­ment they need to ad­vise the client of the ef­fect of the agree­ment and its im­pli­ca­tions.

This means the lawyer will need in­for­ma­tion on what the re­la­tion­ship prop­erty as­sets are and the val­ues be­fore they give their ad­vice. Putting to­gether a list of all prop­erty and pro­vid­ing val­ues and if nec­es­sary val­u­a­tions will as­sist with the process.

Full dis­clo­sure needs to be made by each party to the other of all re­la­tion­ship prop­erty as­sets. If full dis­clo­sure is not made then the agree­ment may be over­turned by the court.

If the par­ties have given full dis­clo­sure and agree on the list and val­ues, they can then reach agree­ment to for­mally record the di­vi­sion of their prop­erty.

If th­ese is­sues are not for­mally set­tled within a rea­son­able time fol­low­ing the end of the re­la­tion­ship, that can cause prac­ti­cal dif­fi­cul­ties later. One part­ner may not be in New Zealand or not be able to be lo­cated.

It pays to get early ad­vice re­gard­ing your spe­cific sit­u­a­tion de­spite the dif­fi­cul­ties of deal­ing with th­ese is­sues when the re­la­tion­ship ends.

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