Split happens: costly relationship property mistakes you want to avoid

There’s no escaping it—dissolving a marriage or civil union, or ending a de facto relationship, are life-altering experiences. You’ll learn a lot about yourself, your ex, your friends, and your family: the good, the bad, and the ugly. It’s a time of complex emotional upheaval and financial uncertainty, before you hopefully reach acceptance, growth, and happiness.

If you are at the start of this journey towards your new life, read this article. It’s important you are aware of common pitfalls and financial missteps to avoid during separation.

Mind the gap: not having a true picture of your financial position

It is critical to gain a comprehensive and accurate understanding of your financial position. A dissolution or the breakdown of a cohabiting relationship inevitably leads to a significant change in financial circumstances, so failing to account for these changes can lead to poor decisions and unfair settlements.

Common assets that need to be considered include:

• The family home
• Savings
• Investments
• Property
• Kiwisaver funds (Superannuation)
• Chattels and vehicles
• Shares

Understanding the true value of assets is key to negotiating a fair settlement. However, people often underestimate the complexity of the valuation process, especially when the true value of some assets, like Kiwisaver funds, is not immediately apparent.



Dividing assets is not a straightforward task. Work with family lawyers in Christchurch NZ who specialise in relationship property to ensure assets are accurately valued so you have a clear picture of the reality of your finances. Seeking the best legal advice ensures you make informed decisions and consent only to a fair deal.

Failing to instruct a family lawyer to draft the Separation Agreement

Obtaining a Dissolution Order is often when people consider their marriage legally over, severing ties between the two parties. A common misconception is that it includes finances. The dissolution process and the finalising of finances are two separate legal issues. Without a legally binding Separation Agreement, there is always the potential for your ex to make a future financial claim against you, or vice versa, even after years. Separation Agreements are also important for de facto and civil partnership breakdowns too.

There are time limits for applying to the Family Court if an agreement can't be reached through negotiation:

• Married couples have 12 months after the dissolution application to apply to the Court.
• De facto couples have three years after the date of separation to apply to the Court.

It is mandatory to obtain legal advice from a family lawyer to explain the implications of the Separation Agreement. However, it is wise to instruct a lawyer to draft the agreement too. Yes, it costs money, but Separation Agreements are often legally technical to ensure all aspects of the settlement are addressed; it’s the price you pay for financial security and peace of mind.

Underestimating the impact of Kiwisaver in the settlement

Retirement may be several decades away, and Kiwisaver may be the last thing on your mind, but life goes by in the blink of an eye. Plus, and this is important to realise, Kiwisaver funds are often one of the largest matrimonial assets, yet they are frequently overlooked or undervalued in relationship property settlements.

Depending on your circumstances, you may be entitled to a portion of your partner’s Kiwisaver, or vice versa. Kiwisaver is complex, and there are several options available, including making an adjustment payment. If you currently don’t have funds to make a payment, you may be able to forgo other relationship property to account for the adjustment, take a loan, or even apply through the Family Court to release some of the money. A specialist family lawyer will clarify the implications of each option and protect your position. By not seeking legal advice, you risk losing out on potentially significant funds. Remember, once a Separation Agreement has been sealed by the Court, it’s difficult and expensive to make a future claim.

Moving on romantically before resolving financial issues

Can you have a relationship before receiving your Dissolution Order? Of course. Can you have a de facto relationship or remarry before you’ve signed an agreement confirming relationship property? It’s not so much a question of "can you?" but rather, "should you?"

Entering a new de facto relationship or remarrying before finalising finances can have serious consequences and potentially jeopardise your financial future. It muddies the water. What would happen to your relationship property if this second relationship doesn’t work out? It’s best to resolve financial issues as soon as possible.

If you are experiencing a delay in reaching an agreement with respect to relationship property, contact Weston Ward and Lascelles’ Christchurch family lawyer team. We are experienced in helping ex-partners communicate and reach equitable agreements swiftly. This step will protect your financial interests and allow you to move forward with your new life without the risk of further financial complications.

Not seeking early legal advice when you separate

Separating can be complex, and mistakes made early in the process can have lasting effects. Some decisions could cost you significant amounts of money, while others could be irreversible, preventing you from moving forward when you want to. While it’s commendable to try to reach amicable agreements with your ex-partner without involving lawyers, it is essential to seek legal advice before making any decisions. A family lawyer provides the guidance and expertise you need to explore all the options available to you, so you can make informed decisions that protect your future financial security. Whether it’s understanding the value of your assets or navigating the complexities of relationship property and childcare arrangements, having quality legal advice is invaluable.

Ending a relationship when your lives are so intertwined is rarely straightforward, but with the quality legal advice, you can avoid costly financial mistakes and secure a stable future. The decisions you make during this time will have a lasting impact on your financial well-being, so it’s crucial to approach the process with care and informed guidance. Weston Ward and Lascelles’ Christchurch family lawyers provide compassionate support and a full suite of services including tax advice and estate planning to protect your assets, interests and future. Contact Weston Ward and Lascelles, your local family lawyers in Christchurch today. Call 03 379 1740 for a confidential chat with one of our team.