Relationship property law under review
When Frances* left her husband after 20 years and four children together, she did not anticipate how hard it would be to get her half of their assets.
The split was acrimonious and negotiations had to be done through a third party.
‘‘I had to make choices at every step around the cost of the lawyer and the likelihood of a positive outcome,’’ she said. ‘‘I might have gotten more if I had gone to court but I was at the limit of my resources.’’
She walked away with a car and $14,000 of her former husband’s KiwiSaver. She had to pay $700 to have the order made to transfer it.
The biggest asset that emerged as a result of their partnership was her husband’s income. He now earns $40,000 a year more than she does – up from $5000 difference at the start of their relationship.
She took 12 years out of her career to look after their children.
It is issues like these that will be considered as the Law Commission reviews the 40-year-old Property (Relationships) Act, which sets out the rules for dividing property in a break-up. It will launch a paper on Monday seeking public feedback.
Among the questions to be considered are whether the law applies to the right relationships, whether the right property is being shared, how the law meets the interests of children, and would should happen if one person is financially worse-off.
Commissioner Helen McQueen said much had changed since the law was first enacted. Now, 46 per cent of children are born to unmarried parents. The way relationships start, end and how people changed.
‘‘Repartnering is something that is extremely complex from the perspective of dividing property,’’ McQueen said.
There were questions about whether the right de facto relationships were being captured by the law, she said. More people were partnering later in life and choosing to keep their financial affairs separate. repartner has also
‘‘If people do bring property into a relationship and have a very strict sharing regime where they each pay half the food and half the rent or mortgage, do they actually have any expectation they would share property at the end, or do you they expect to walk away with what they brought to it?’’
McQueen said the review would consider what was counted as relationship property. It was possible that could include the ability to earn income, if the relationship had allowed one person’s career to advance ahead of the others.
‘‘There are a lots of hard things about that. It’s not easy to value someone’s earning capacity ... they have to go on and earn it, earning capacity doesn’t just sit there waiting to be divided as a monetary sum.’’
Lawyer Selina Trigg, who specialises in family law issues, said the law as it stood seemed straightforward on the face of it.
But closer scrutiny often revealed unfairness. There were problems in particular in relation to the section of the law that dealt with economic disparity. Trigg said it had not lived up to its potential.
‘‘The focus has been on compensation for a spouse for loss of income and earning ability due to their domestic responsibilities rather than looking at the positive enhancement to the other party’s career and income-earning abilities that was aided by the spouse holding down the fort and looking after the kids.’’
The Law Commission is seeking feedback on its work until February and will report to the minister next year.
Frances did not want her full name used, to avoid identification.