Relationship Property

A reasonable proportion of my work involves helping people separate from long-term relationships.  Separation throws up questions on all sorts of issues such as where children will live, making financial and other adjustments to life after separating, and dividing relationship property. 

Whether a particular item of property is ‘relationship property’ or ‘separate property’ is determined by the Property (Relationships) Act 1976.  This line between relationship and separate property can become blurred, as was discussed in a recent article on stuff.   

What is relationship property?

So what is deemed as relationship property? According to https://communitylaw.org.nz/ , relationship property is: 

• Property owned jointly or in equal shares by the spouses or partners 

• Property acquired during the relationship 

• Property received in contemplation of the relationship and intended for shared use or common benefit/.

Example:

The classification of property as either relationship or separate property can create significant challenges for separating couples.  The Stuff article considered a recent case from Blenheim where the High Court decided that an artist’s copyright in her paintings was relationship property.   

Because of that classification, the artist was required to value and then share her copyright interest with her former husband, even though she personally held them.  The value in copyright was one item of relationship property and the paintings themselves were different items of relationship property.  

Other types of personally held property that may be deemed relationship property include shareholdings, interests in a trust, and superannuation savings, to name a few. 

The decision is correct, but the outcome can seem harsh depending on your perspective. Although the artist made a significant personal investment in her work (i.e., time and talent), the copyright and the paintings were both products of the relationship.  That is, the relationship enabled her to pursue her work and her husband had supported her work.  The fruits of her labour should therefore be credited back to the relationship, rather than being attributed to her personally.   

To read the full article, click here. If you (or someone you know) are grappling with separation issues then I would be keen to help.  It is important to get legal advice early and gain a clear understanding of how the law may impact your separation decisions.  Please don’t hesitate to contact me.