4 common reasons people get a separation agreement

There are many reasons couples get a separation agreement but the below are the top four common reasons we get approached for our service.

 

1. The bank told you to get one

More and more it seems people contact us because they need to get a separation agreement before the bank will take someone off the mortgage.

 

2. The boat, the car, or the motorbike?

Not much more to say, except no one wants a sharing arrangement for their vehicle.

 

3. Debt

The last thing you want to be doing is paying off your ex’s student loan.

 

4. Trusts

Sort out that thing you put your property into and don’t really know much else about it, except now you want your property back out.

 

Rental properties, savings, your favourite couch, whatever it is, there are things you want to make sure you keep when you separate.

 

Separating is already a difficult process and the thought of involving lawyers only adds more stress. Where do we even start? Lawyers are expensive, how much will it cost? We know what is ours, why do I need a lawyer complicating it? How long will it take?

Well Agreeable is here to make the process easy for you. Whether the bank is making you get one, or you want one for any of the above reasons, we are here to help.

 

How can Agreeable help?

  1. For $350.00 you can purchase a separation agreement (here). The software will lead you step-by-step through creating your own agreement.
  2. Once completed, we will work with you make sure the agreement is in the best shape possible!
  3. We arrange two independent lawyers to certify your agreement (make it legally binding).

We can complete the process in 10 days from payment. The cost for certification will be a fixed price quoted to you prior to proceeding (see the pricing structure below).

If you need any further information, enquire now!

 

Pricing structure for Certification/Advice (incl. price for two independent lawyers). See what you might expect to pay when you certify your separation agreement through Agreeable*

Basic

$1,500 + GST

 

Our Basic package is best for dividing assets and liabilities like:

  • A family home
  • Vehicles
  • KiwiSaver and superannuation
  • Cash accounts
  • Pets
  • Family chattels (such as boats, furniture, jewellery, etc)

Moderate

$1,750 + GST

 

Your agreement will be Moderate if you’ve got some more sophisticated assets or you need legal input to ensure the agreement is effective in your particular circumstances. In addition to the assets included in the basic agreement, there will likely be some of the following:

  • Businesses,
  • Rental properties,
  • Adjustment payments (where one party pays the other to compensate for an unfair asset divide)
  • Trusts*
  • Unfairness between what each party ends up with following separation

*If you have a trust, we will work closely with you to find the best course of action and cost. Depending on the trust arrangements required, the agreement could be a Complex rather than Moderate one.

Complex

$X,000 + GST

 

The price for a Complex agreement is difficult to estimate, but Agreeable will either provide a quote or help facilitate an ongoing arrangement between lawyers and clients.

A Complex agreement is likely one where a significant amount of money is being divided, large businesses, complex trusts or businesses alongside the other factors already included in the Basic and Moderate packages.

Create a separation agreement online

Pre-nups are going to become more important… here’s why

The Law Commission has recommended continued support for pre-nups in any legislative change. Relationships fail and a third of marriages end in separation. Going to court is notoriously slow and expensive.

 

The New Zealand Law Commission in its 2019 review of Relationship Property said:  

The law should continue to enable partners to make their own decisions about how to divide their property before or during a relationship, and in order to settle any differences that arise between them. The procedural requirements in the law should continue to apply (meaning the agreement must be in writing and witnessed by a lawyer who gives independent advice about the implications of the agreement).  

The law strikes the right balance between allowing partners the freedom to make their own agreements about how their property should be divided on separation, while protecting vulnerable partners by ensuring that they enter such agreements with informed consent.  

So, the law is going to continue to allow for these agreements and to support them unless they are “seriously unjust”. 

 

Don’t risk it. Spend less than $2000 now to save tens or hundreds of thousands of dollars later.

 

The 2019 Grant Thornton Relationship Property survey found:  

  • Growing apart/falling out of love was by far the most common reason for separation, named by 75% of respondents, up from 67% in 2017. Extra-marital affairs were second, up slightly at 57%, with unreasonable behaviour also up slightly to 31%.
  • Relationships of between 10 to 20 years are the most likely to separate.
  • Those in their forties are the most likely to separate but there was a strong rise in the need for advice on separation agreements and pre-nups for the 50+ age group.
  • The most common relationship property pool included assets valued from $500,000 to $1 million.
  • The number one problematic issue encountered by family lawyers was systemic delay in the Family Court.
  • Many lawyers think court time allocation for relationship property cases has become worse.  

Statistics New Zealand’s 2019 report “Good things take time” told us that people are getting married later and less often, having children in their 30’s and separating at the same rate (overall about a third of marriages end in separation).  

Far more people are living together as couples these days and once they have lived together for 3 years or more, Relationship Property law applies to them (even if they don’t want it to).  

With property prices as they are (the NZ median house price in March 2020 was $665,000) many first home buyers are going to be borrowing from the bank of mum and dad. If you want to protect that money, you are going to need a pre-nup. Otherwise, after three years living together, the house will be relationship property and the presumption is a 50/50 split of the net value. 

Relationships fail and the courts can’t deal with disputes quickly or cheaply. There is often a lot of money at stake, and you want to be able to sort it out fairly and efficiently. 

So if you are in a relationship, don’t risk it, spend now to secure your assets. 

Create a relationship property agreement online

Why get a prenup?

There is one thing that comes to mind when I hear the word prenup: sensible, but awkward. It would be the sensible thing to do, but so would not buying brunch every weekend. So why?

 

Why?

Well at some point in the next 3 years I am going to stumble into a de-facto relationship without even knowing it. At which point, as far as the Property (Relationships) Act is concerned, I am married to the lucky person. Imagine if after 3 years of eating at your favourite café you got an equal share in its business. I mean, you contribute to the business by buying eggs Benedict there every weekend, so maybe you should own some of it. But is this necessarily fair?

 

How does the law work?

This is the somewhat peculiar logic applied by the Property (Relationships) Act, which currently governs how relationship property is dealt with (which becomes pretty important when people split). Under the Act, property should generally be divided equally between partners based on the family use approach. This means that if you were lucky enough to buy a house while single (apparently it is possible), then found yourself in a relationship and sharing the house for 3 years, your partner would effectively own half the house. This logic applies to all property (except taonga and heirlooms).

However, the Act also gives couples the ability to “opt out”, meaning they can agree for themselves how their assets will be owned and divided if they split up. Such agreements must be in writing and are commonly referred to as “prenups” (in American soap operas) or (here in New Zealand) relationship property agreements or “RPAs”.

 

Future changes

The Law Commission recently conducted a review of the Property (Relationships) Act and outlined 8 ways the family use approach can end in unfair outcomes. Without delving too far into them, they typically highlight the unfairness related to an equal division of property when one person has contributed more.

In the course of the review, the Law Commission made several recommendations for how our law could be changed to better address issues around relationship property. Fortunately for all of us, one of the recommendations made was that there should be an entirely new Act. Unfortunately for us, the slow-moving wheels of democracy will most likely delay that for the immediate future.

 

How do relationship property agreements fit in?

One of the Law Commission’s recommendations was that the ability to opt-out of the Act should be retained and improved. This serves as reassurance that prenups will continue to be effective, despite the uncertain future of the current Act. Furthermore, the introduction of a section dedicated to the use of audio-visual technology will ideally be included. We think the future of Agreeable’s RPAs is secure.

Despite this, as with any new Act, the ramifications may remain opaque until tested in court. It has become apparent that the best way to ensure the best outcome for both your partner and you is to simply get an RPA. At the sacrifice of an awkward conversation, it allows you to feel secure and retain control of your assets. Better to decide yourselves what happens to your property, than leave it to an old Act that is well past its use by date, or a new Act that will likely have its own growing pains.

With the above in my mind, instead of asking yourself why get an RPA, maybe you should be asking, why let someone else decide what happens to my assets?

 

Important things to remember:

  • RPAs can be set aside either fully or partially by the court if they are found to cause serious injustice.
  • RPAs are void unless both partners receive independent legal advice on their effects and implications and are subsequently certified by separate lawyers (the court can give them effect in some circumstances).
  • Getting an RPA is considerably more cost effective than a trip to the Family Court.
  • It is rare that you get the opportunity to simply opt-out of law.
  • De-facto relationships are on the rise in New Zealand (Stats NZ).
  • You need to make sure you’re aware of when you become de-facto and what that means.
  • You can get an RPA at any point in the course of a relationship.

 

Further reading:

Review of the Property (Relationships) Act 1976

Stats NZ counts Kiwi couples in and out of love 

 

[1]  The Act has complex definitions of relationship property and separate property, so this description is deliberately broad and general.

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