The fallout when you come out of a relationship is not fun on many levels. The bit that we get involved in is the financial side – who gets what.
Nobody thinks they’ve won, and nor should they. It is meant to be fair – that’s why the financial contribution that one partner makes is not the whole story.
So you were the main breadwinner. You feel aggrieved. You vow not to get caught like that again. After all, everything is meant to go to the kids when you turn up your toes, right!
So you come up with a cunning plan to get everything you own across to a Trust so that, when you meet Ideal Partner Version 2, you own nothing but your Trust owns everything. And even though the Trust owns everything, you still call the shots.
It’s the perfect scenario - I mean, who cares who owns the Ferrari if you’ve got the keys!
Well have we got news for you!
This year the law changed.
Listen carefully! Thanks to the Supreme Court in Sutton v Bell if you transfer property to a Trust at a time when you and Ideal Partner Version 2 (lets just go with “v2”) had “a clear and present intention to become parties to a de facto relationship” it can be unravelled and the assets you transferred to the Trust can come back into the pot if you go your separate ways.
That’s scary.
That basically means that if v2, who by now has proven to be less than ideal, can show that you had “a clear and present intention to become parties to a de facto relationship” you are sunk for the second time.
The big question is going to be what do you have to do to show that you had “a clear and present intention to become parties to a de facto relationship”?
The Court gave us some guidance on this: If you and v2 are only in a “romantic relationship” with no “clear and present intention to become parties to a de facto relationship” you have just slipped the noose.
We can only hazard a guess at this stage about what a romantic relationship means, but it sounds saucy.
Clearly though, it is not clear!!
So what can you do?
Well, you could pull the pin on v2 until there is enough doubt about whether there was ever “a clear and present intention to become parties to a de facto relationship”. Then you could get back with v2 after you’ve done the Trust thing and pick up where you left off. Good luck with that!
Or do nothing and leave the fallout for your kids and v2 to deal with when you’re gone. Your ears will be burning from the grave. Thanks for that!
The smart money, in my humble opinion, would be to put in place a Relationship Property Agreement.
Okay, I understand that this might seem a bit premature because we’re talking about signing a pre-nup much earlier that society would have thought necessary up until now. But it looks like the safe option.
Plus people are wising up to the value that a Relationship Property Agreement can add and the certainty it can bring (to both parties). It used to be something that was taboo unless people were splitting up.
Now it is a mainstream discussion between partners, and so it should be.
Funnily enough, we at Queenstown Law can help you with this. Feel free to contact us on phone 03 450 0000 or russell@queenstownlaw.co.nz or claire@queenstownlaw.co.nz