When couples separate, every situation is different, some couples have lots of property to divide, and others have very little. No matter what the situation may be, it is essential that when an agreement is reached as to how relationship property should be divided that a Separation and Property Division Agreement is entered into. Below we explain what this is and why separating couples should have one.
What is it?
A Separation and Property Division Agreement (also known as a settlement agreement) is a written agreement setting out how a couple’s property is to be divided following their separation. It is generally the last step in the separation process, following the disclosure process (the exchange of information about assets and liabilities) and negotiating who gets to keep what.
Why you need one?
It is important that couples enter into a Separation and Property Division Agreement even if they have reached an agreement without the assistance of lawyers. Some couples who are amicable following separation may have reached an oral agreement or signed a written agreement without seeking legal advice and therefore may be reluctant to see a lawyer to simply ‘look over’ something they are already happy with.
However, unless an agreement complies with the following formal requirements, it is not binding:
• The Agreement must be in writing and signed by both parties;
• Each party must have independent legal advice before signing the Agreement;
• A lawyer must witness each party’s signature; and
• The lawyer who witnesses the signature of a party must certify that they have advised as to the effect and implications of the Agreement.
This means any agreement that does not comply with the above formal requirements provides no certainty moving forward and it would be open to each person to come back down the track and argue that what they received was not in line with their legal entitlement and therefore not just, or that there was not full disclosure of all assets and liabilities, so they want a piece of what was not disclosed. This means assets one person may have acquired following separation may not be protected from further division.
Even if a couple has a Contracting Out Agreement (or Pre-Nup) that records how their assets are to be divided upon separation, it is essential they still enter into a Separation and Property Division Agreement as the Contracting Out Agreement may not cover all assets, or it may be that one person wishes to have the Contracting Out Agreement set aside.
What is included?
We recommend all assets and liabilities owned by a couple in their joint names or in their sole names are included in the Agreement. An Agreement can also include property that may be classified as separate property and interests in trust property.
For example, the Agreement should record who keeps the Family Home, who keeps the pets and how and when assets should be transferred to each party.
See ‘What is Relationship Property?’ for more information about what can be included.
How long will it take?
Each situation is different and can vary depending on the complexity of the situation, the assets involved, the disclosure process, and negotiating and advising on the terms of the Agreement.
Our team of expert family lawyers will work with you through the process and ensure that you are fully informed throughout, so you know what to expect.
For more information:
It is essential when you separate that you get early advice as there are time limits for applying to the Court to resolve relationship property matters if an agreement cannot be reached.
For more information around separation issues or any agreements you may have reached, please contact our Wellington based family lawyers:
Debbie Dunbar | 04 495 9940 | Debbie.email@example.com
Maretta Twentyman | 04 495 8918 | Maretta.firstname.lastname@example.org
Anna Chapman | 04 495 8905 | Anna.email@example.com
Racheal Allison | 04 495 9949 | Racheal.firstname.lastname@example.org