FAQ: Relationship property agreements

 

Planning for the future can be scary, however, by avoiding it, you can face a number of financial problems down the line. To avoid this, it is important couples create an agreement that will separate and divide assets according to the legal requirements of New Zealand family law in the event of separation or death.

While some people believe that they can create a legally binding agreement without the expertise of a lawyer who is experienced in New Zealand property and family law, they may be risking more than their time.

Here are three reasons why you need a family lawyer to help you develop and sign a relationship property agreement.

1 – A lawyer can ensure an agreement is binding

Some of the many questions that family lawyers face include: “Do we need both lawyers to sign off on the agreement?”. Which can be followed by “we have everything in order, we just need you as a witness”. However, the law is not that simple.

Acting as a witness in the case of a relationship property agreement is more than simply watching signatories write their name on the dotted line. Under the Property (Relationships) Act 1976, lawyers are required to satisfy a number of obligations when witnessing an agreement.

These obligations manifest in a number of responsibilities. For instance, signatories of an agreement need independent legal advice or else the agreement will be null and void. Specifically, the Act outlines what makes an agreement binding, these include:

• It has to be in written form and signed by both parties
• Each party privy to the agreement must have independent legal advisors
• The lawyer who offers independent advice must also be a witness of the client’s signature.

If these requirements are not met, the agreement is neither legal or binding under the law. If this occurs, you could face issues in relation to the protection of your assets.

2 – A lawyer can help develop a robust Relationship Property Agreement.

There are a number of reasons why a couple would think about developing a Relationship Property Agreement. Generally, people look to enter into an agreement for two reasons:

• An assurance that specific assets will be protected in the event the relationship breaks down
• To divide and distribute their property in the event a couple separates

With these two goals in mind, an agreement needs to be both comprehensive and durable. If this is not the case, it can be challenged down the line and leave the asset pool open to equal division.

As such, it is important to ensure lawyers are involved when the agreement is created and when it is signed. Otherwise, the agreement can be found void and it therefore offers very little protection to your assets.

3 – A lawyer can offer you a critical analysis

When people think of a critique, they tend to imagine academics and political figures. However, one of the central responsibilities of a lawyer is to offer insightful and pertinent advice.

Their job is not to just give your situation a once over and offer you a light commentary on your agreement. Instead, they will offer professional opinions on its viability, including whether it will protect your interests and meet your needs.

To accomplish this, a family lawyer will need you to provide a wide variety of information. This can include:

• Full disclosure on what the assets are
• Their legal classification at the time of the agreement
• A valuation statement

To avoid financial loss in the future, it is essential to have an experienced lawyer in your counsel when entering into a relationship property agreement. Talk to Wynyard Wood today to find out how they can help protect your assets through a durable agreement.