The law says that a couple can make an agreement about their property.
There can sometimes be difficulties if the partners have an interest in property but someone else holds the property. When property is held on a trust or a KiwiSaver scheme there can be problems.
Making agreements when property is held on a trust
It is common for families in New Zealand to use trusts to hold and use property. As many as one in five homes are held on a trust in New Zealand.
We look in greater detail how the Property (Relationships) Act 1976 deals with property held on trust here.
Under a trust, a person called the trustee owns the property. But the trustee is not the ultimate owner. Instead, the trustee must use and manage the property for the benefit of the beneficiaries.
The law is unclear whether the partners can make agreements about property held on trust. They are not the owners of the trust property. Even if the partners are beneficiaries they might need to make a separate agreement with the trustees.
The law also gives partners the right to go to court if a trust has affected their rights to the property. Sometimes it may be better if the trustees settle the partners’ claims so everyone avoids lengthy and costly court cases.
The partners might need to make a separate agreement with the trustees to settle claims. The law is unclear whether partners can agree with the trustees to settle a claim against a trust in the same agreement about the partners’ other property.
We want to know here whether you think it the law should be more flexible.
What do you think?[gravityform id=”2″ title=”false” description=”false”]
Making agreements when a partner has KiwiSaver savings
The law says that a partner may have to share KiwiSaver savings with the other partner if the savings accrued during the relationship. Sometimes partners can leave their savings in the KiwiSaver scheme but pay the other partner an equivalent sum of money.
If partners cannot afford to pay the money, they might have to divide the actual KiwiSaver savings.
KiwiSaver schemes have said that partners cannot split or withdraw their KiwiSaver savings through an agreement. KiwiSaver members can only withdraw their savings when purchasing their first home or when they turn 65. KiwiSaver scheme providers say that the partners must first obtain a court order if they want to divide their KiwiSaver savings.
We want to hear whether you think people should be able to deal with their KiwiSaver savings through an agreement without going to court.
KiwiSaver savings are important assets. They are to provide people with savings for significant life events like buying a first home or retirement. The longer KiwiSaver members keep their funds in the scheme, the return on the funds will be better. If people withdraw savings too early from KiwiSaver, they can lose money. Perhaps the law should make sure people do not withdraw their KiwiSaver savings too easily. It might be better that partners need a court order to divide their KiwiSaver.
On the other hand, if partners can divide KiwiSaver savings without going to court, it could save people time and money. Also, when people enter an agreement they need to have it recorded in writing and they need to receive independent legal advice. These might be enough safeguards.