Where to begin with dividing relationship property?
Written by Will Story
This is the second instalment in Fair Way’s new Separation Series, focusing on the experiences and challenges families face during separation.
The process of ending a relationship and separating has many challenges. In our last blog we focussed on the immediate need for parents to support their children through separation; to work on how their co-parenting relationship will outlast the separation, and to make a plan for the future.
While conversations around the division of relationship property often follow conversations around the kids (rightly so), many have no idea of when, where or how to begin the property conversation. If you have recently separated, you may be faced with looking for new accommodation and maybe even having to pay market rent on top of keeping up the regular mortgage repayments on the family home. You may be asked to start making child support or spousal maintenance payments to your ex. If you shared a family car, you may even be on the hunt for an independent set of wheels and that is going to cost you. Meanwhile, the bills keep rolling in and the million-dollar question is, who will pay them, and how? Financial pressures can compound what is already a very stressful time for separating couples.
It is important that parties seek assistance from experts early on. Firstly, it pays to have a thorough understanding of your legal rights and obligations. Relationship property can be complex and the best person to provide you with the advice you need is a lawyer who specialises in relationship property. There are many things that you will need to know such as what happens to the mortgage - who is responsible for making ongoing loan repayments (whether joint or individual)? Who is responsible for meeting the kids’ school fees? What happens to joint funds that are spent after separation? What happens to individual savings accounts etc – can I spend that money? Is your ex responsible for helping you pay for your new rental accommodation, or car?
After you are armed with this information and you are now aware of your legal rights and obligations to your ex and children, you can make an informed decision on how and when you will tackle the conversation around how your property is to be divided. Many lawyers like to communicate by letter and email. If you engage a lawyer to negotiate on your behalf, you may not need to have any conversations with your ex. This can be appealing. Lawyers will often suggest writing a letter to your ex or their lawyer requesting disclosure of assets and liabilities, and eventually when that disclosure has been exchanged between both parties, proposals for how the property will be divided are circulated. While a resolution can be reached through this process, it can be costly and drawn out. It also does nothing to foster rebuilding the damaged communication bridge with your ex.
Another process which you can (and should) consider is mediation. Why mediation, as opposed to getting my lawyer to sort it out through negotiations with my ex’s lawyer, you might ask? Part of a lawyer’s job is to advocate. Lawyers often do this by drawing a line in the sand and believe that they are being strong advocates by not backing down from the line which they have drawn for their client. Lines in the sand often encourage parties to become fixed in their positions. Mediation, on the other hand, provides the opportunity for direct communication between the people who actually need to make the decisions. People are far more likely to be themselves at mediation, letting their guard down when they have the chance to engage in discussion with one another directly. It’s an opportunity to share what’s important to you and why, and to understand the other person’s reasoning too. In my opinion, agreements reached at mediation often better reflect parties’ actual needs and for that reason, are likely to survive longer. But most importantly, mediation provides the opportunity for parties to leave with their (civil) relationship intact. And to design their own solutions.
When it comes to the agreement reached, you have two options. If you are wanting a legally enforceable agreement, to comply with legal requirements you will need to have a lawyer sign and certify that they have advised you in respect of the agreement, and that it complies with the formalities of the law. We can help you with this. Otherwise, if you are happy with something a little less formal, you can have that too. At Fair Way can talk to you about all your options.
Finally, if you are reading this blog and have not yet reached separation and have property to protect, seriously consider a “pre-nup”, or Contracting Out Agreement. This can save you a lot of strife and may even mean that there is no need for lawyers, or mediation for that matter, when your relationship ends. Now there is a thought well worth considering!
About this blog
When couples separate, there is a lot to think about and sort through. Fair Way supports families through separation each day, so we have decided to create an article series that shares information and advice on the common challenges faced by parents navigating this change.
If you need some support, reach out to Fair Way. Our team of expert Family Dispute Resolution mediators support whānau throughout Aotearoa to create parenting plans.
We also provide Relationship Property mediation services when people need to work through how they will divide their shared property. Contact us on 0800 77 44 20 to see how we can help you.