When a couple separates it can be a very sad and confusing time. Here are a few tips to help you know what information you will need to give your legal advisor to help you through the minefield of separation....
When a couple separate it can be a minefield. It is usually unknown territory for them and an understandably confusing time. When they first make contact with a lawyer they have no idea what that lawyer might need from them. Lawyers cannot help them through the emotional issues involved in the separation, their role is to sort out the legal issues. This may seem very obvious but often the line is blurred and without realising it emotional issues can impact on the ability to resolve legal matters and move on.
When sorting out legal issues the first step is to assess what the net position is of the couple. The starting point under the Property (Relationships) Act is to share all relationship property equally. There needs to be disclosure of all assets and liabilities in which either may have an interest. Information that is needed to assist in this assessment includes:
- Copies of bank statements for the separation date. This includes for joint bank accounts and accounts in your sole name, or in which you might have an interest with other people. For instance I have had clients who have a holiday account with a friend for a planned week away. This account has been contributed to from income into the relationship and therefore it is relationship property.
- Details of any superannuation or kiwisaver entitlements, both at the start and end of the relationship.
- Details of any life insurance policies. These days most are death only policies but sometimes there is a value that needs to be taken into account. At the very least they may need to be transferred so that the owner of the policy is the person insured.
- Assessment of any property values. If one person is wishing to retain any property then a registered valuation is likely to be required but often couples will rely on a real estate agents valuation.
- Details of any debts, this includes mortgage, personal loans, store cards and credit cards or HP arrangements. Are there any interfamily loans that need to be taken into account. This is increasingly common in today’s housing market.
- Details of any companies the couple may have. These may need to be properly valued but a starting point would be the most recent set of financial accounts.
- Details of vehicles. Often people simply keep the vehicle they drive without adjustment but a value close to separation should be obtained.
- Chattels are usually able to be sorted without too much difficulty however if there is likely to be an issue then they should be valued. They can then be divided by agreement and if necessary any adjustment for a monetary difference can occur with all other adjustments.
- Details of any other shares that might have been acquired during the relationship. These might have been acquired as part of an employment contract or simply purchased during the relationship.
- Details of any other assets. For instance boats, ride on mowers, expensive recreation equipment or say horses.
- Copies of any agreements entered into by the couple making their own rules about property sharing.
- Details of any Trusts, including copies of trust deeds, associated documents, financial statements, and property owned, along with any debt back that might be owed, distributions made and details of transfers to the trust. Obviously trusts established during the relationship, or by one of the parties are the most relevant however even trusts established by third parties could be open to scrutiny.
It is not expected that all information will be immediately available. Some will only be available after the other party provides it. For instance a bank will not release information about someone else’s separate accounts. However with online internet banking available often both parties do have access to the others accounts.
Sometimes it is when bank statements are looked at that other assets are discovered. This obviously could be other unknown bank accounts but it could even alert you to properties you did not know existed.
For property division agreements to be binding there must be proper disclosure of all assets in which each party is entitled to share and both parties must have their own lawyer advise them as to whether they should sign the agreement. It is important that any agreement is completed in a considered way, without any suggestion of duress. The saying “marry in haste repent at leisure” could equally apply to resolving property division on separation.
If parties feel comfortable having discussions between themselves directly around property division we encourage our clients to do this. However, it is very important that they do not agree to anything until they have had legal advice.