Our Connie Hyslop, a Solicitor in the litigation team at CS Law, shares some prudent advice for couples facing a break-up with assets involved.
Separating from a partner or spouse is a difficult and uncertain process. Add to this the financial strain that comes with separating, and the whole process can become very stressful very quickly, particularly if you receive a letter from a lawyer acting for your ex-partner or spouse.
When do you need to seek legal advice?
You should get a lawyer involved when there are assets and/or debts which you both own or are responsible for and that now need dividing. These assets and debts are known as “relationship property”. The most common example of a relationship property asset is the family home, which the law specifically provides is relationship property regardless of when it was acquired, or in whose name (or names) the home is registered in.
The rules around dividing your relationship property are governed by the Property (Relationships) Act 1976. This legislation applies to couples who were in a de facto relationship, married or in a civil union. Different rules may apply depending your specific circumstances, such as the length of your relationship. Generally, the starting point is that relationship property is to be shared equally on separation, unless the parties have previously entered into a Contracting Out Agreement that says otherwise (also known as a “Pre-Nup”).
What are the steps for reaching an agreement?
In order to reach a legally binding agreement with your ex-partner, it must meet certain legislative requirements, including that the agreement be in writing and certified by the lawyer acting for each party.
Before your lawyer can certify an agreement between you and your ex-partner, they must have a full understanding of the relationship property pool (i.e. the assets and debts that existed during your relationship). This means that each party must provide full disclosure of the assets and debts that they had during the relationship, including ones that the other party may not have been aware of, so that negotiations can occur fairly and with the full knowledge of what the relationship property pool consisted of.
If you and your ex-partner do not formally agree about the division of your relationship property, this can leave things hanging and uncertain as you try and move forward. The benefit of having a formal relationship property agreement drawn up is that it confirms each of your obligations and liabilities in respect of your relationship property.
The ultimate goal for resolving separation and relationship property matters is to not only achieve an outcome that is fair and in accordance with the legislative principles, but also to achieve a timely resolution that enables each person to move on with their separate lives. To that end, it is always helpful to seek legal advice about your separation as soon as possible (even if you both agree) so that you can focus on what’s important.