Scenario: Gifts in Relationships
If you receive a gift while in a relationship, especially in a marriage or de facto relationship, it might be considered relationship property. This means that, upon separation, the gift could be divided between both parties. It’s essential to clarify ownership and document the gift properly to avoid disputes later.
In New Zealand, the Property (Relationships) Act 1976 governs how property is divided between partners when a marriage, civil union, or de facto relationship ends. Under this law, gifts received during a relationship can be considered relationship property, which means they might be subject to division between both parties upon separation. Here's a detailed explanation:
Relationship Property vs. Separate Property
Relationship Property: This includes all assets acquired by either partner during the relationship and is generally shared equally upon separation. This can include the family home, shared bank accounts, and even gifts given to one partner during the relationship.
Separate Property: Assets owned by one partner before the relationship or assets received as personal gifts or inheritances during the relationship are generally considered separate property and are not divided upon separation. However, there are important exceptions to this rule.
Gifts in Relationships
Gifts as Relationship Property: If a gift is given to both partners or used for the benefit of the relationship, it is likely to be considered relationship property. For instance, if one partner receives a gift and it is used to purchase something for the household (like a car or furniture), that item may be considered relationship property.
Gifts as Separate Property: If a gift is clearly intended for one partner only and is not used for the benefit of the relationship, it might be considered separate property. For example, if a partner receives a gift of jewelry or money that is kept separate from joint assets, it could remain separate property. However, if that money is used to buy something for both partners, it may be reclassified as relationship property.
Documentation and Clarification
To avoid disputes, it’s crucial to document gifts clearly and explicitly state their intended ownership. This might involve:
Gifting Documentation: If a gift is intended to be separate property, it should be documented clearly, such as in a written agreement or gift declaration. The giver should explicitly state that the gift is intended for one partner only and is not to be used as relationship property.
Pre-Nuptial Agreements: Couples can enter into a Contracting Out Agreement (often referred to as a prenuptial agreement) to specify how gifts and other assets will be treated in the event of a separation. This agreement can override the default provisions of the Property (Relationships) Act, giving both partners clarity and protection.
Legal Disputes
In cases where the ownership of a gift is disputed, the Family Court in New Zealand will consider various factors, including the intention behind the gift, how it was used during the relationship, and any documentation that clarifies its intended ownership. If no clear documentation exists, the court may decide to classify the gift as relationship property, subject to equal division.
Conclusion
In New Zealand, the classification of gifts received during a relationship can have significant implications during a separation. It’s essential for couples to clarify ownership, document gifts appropriately, and consider legal agreements to avoid disputes. Consulting with a lawyer to ensure that gifts are classified correctly and protected as intended can be a wise precaution.
APA Style Citation
Family Court of New Zealand. (n.d.). _Property (Relationships) Act 1976_. Retrieved from https://www.familycourt.govt.nz
Ministry of Justice. (n.d.). _Dividing your relationship property_. Retrieved from https://www.justice.govt.nz
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