Relationship property specialist Sharon Chandra answers six frequently asked questions about how property is divided when a relationship ends.

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How is property divided upon a separation?

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In New Zealand, the default position under the Property (Relationships) Act 1976 is that all relationship property is divided equally between the partners, although there are some exceptions.

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What falls under ‘relationship property’?

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Relationship property typically includes the family home and chattels, and all property acquired during the relationship, although there can be some exceptions.

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How is separate property treated?

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Separate property includes assets owned before the relationship, as well as gifts, inheritances, and distributions from a trust. It is not divided equally and is generally retained by the spouse who owns it. However, if any of these assets are mixed with relationship property, they can lose their status as separate property.

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How are debts divided?

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Whether a debt is shared between partners does not depend solely on whose name the debt is in. It is instead determined by how the funds were used. 

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Generally, if the debt was incurred for the benefit of the family, such as for household expenses, shared purchases, or family-related needs, it will typically be the responsibility of both partners. This means even if the debt is in one partner's name, it can still be considered a relationship debt and shared upon separation.

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Can both parties agree on the division of their property without legal advice?

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While couples can reach an agreement on their own, it is strongly recommended that they seek legal advice before finalising any terms. There is a formal process that must be followed to properly document the agreement, which requires both parties to sign a separate written agreement and, to ensure its validity, receive independent legal advice regarding their legal entitlements compared to the terms outlined in the agreement. This step helps to ensure that both parties fully understand their rights and obligations before the agreement is finalised. 

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I often see partners change their mind about an agreement once they receive advice about their entitlements, so it’s really important that they obtain legal advice before agreeing to anything.

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What happens if they can’t agree?

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If the couple can't reach an agreement, they can either engage a lawyer to negotiate on their behalf, seek assistance from a mediator, or take the matter to court. Since every situation is unique and requires specific guidance, I recommend they seek legal advice.

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