How are assets divided in a divorce?

Asset division in New Zealand in a divorce

In New Zealand, the division of assets in a divorce (or separation for de facto couples) is primarily governed by the Property (Relationships) Act 1976. Here’s a general overview of how assets are divided:

1. Equal Sharing Rule (50/50 Split)

If a couple has been married, in a civil union, or in a de facto relationship (living together as a couple) for at least three years, their relationship property is usually divided equally.
This includes assets such as the family home, vehicles, furniture, joint bank accounts, superannuation (KiwiSaver), and business interests acquired during the relationship.

2. What is Relationship Property?

The family home and contents (regardless of who paid for them).
Joint bank accounts, investments, and savings.
Vehicles, businesses, and income earned during the relationship.
KiwiSaver and other retirement funds accumulated during the relationship.
Any property purchased or acquired during the relationship.

3. What is Separate Property?

Property owned before the relationship began, unless it has been intermingled with relationship property.
Inheritances or gifts received by one partner (unless they have been shared or used for the benefit of both partners).
Compensation payments (e.g., ACC lump sum payments).

4. Exceptions to Equal Sharing

In some cases, the 50/50 rule does not apply, such as:

If the relationship lasted less than three years, division is based on contributions, not automatic 50/50.
If one partner made significantly greater contributions, the court may decide that an equal split is unfair.
If there are extraordinary circumstances that would make an equal division extremely unfair.

5. Relationship Property Agreements (Contracting Out Agreements)

Couples can create a contracting out agreement (prenup or postnup) to decide how their property will be divided in case of separation.
This must be in writing and signed by both parties with independent legal advice.

6. The Role of the Family Court

If the couple cannot agree, the Family Court can step in to decide how assets will be divided.
Mediation is often encouraged before going to court.

How is KiwiSaver Divided?

Part of Relationship Property
- If KiwiSaver contributions were made during the relationship, they are usually shared between both partners.
- Any KiwiSaver funds accumulated before the relationship typically remain separate (classified as separate property).
Splitting Process
- If both partners agree, they can negotiate a fair split through a relationship property agreement (lawyer involvement required).
- If they can't agree, the Family Court decides how to divide KiwiSaver and other assets fairly.
- The court can order a portion of one person’s KiwiSaver to be transferred to the other’s KiwiSaver account (but it can't be withdrawn in cash).
Exceptions
- If the relationship is less than 3 years, KiwiSaver may not be split unless there are exceptional circumstances (e.g., significant contributions made by one party).

Key Points to Remember

KiwiSaver cannot be cashed out early—it can only be transferred into the other person’s KiwiSaver account.
If you both have KiwiSaver, sometimes the division balances out and no transfer is needed.
You must follow proper legal processes (agreements need independent legal advice).

1. Equal Sharing Rule (50/50 Split)

If a couple has been married, in a civil union, or in a de facto relationship (living together as a couple) for at least three years, their relationship property is usually divided equally.
This includes assets such as the family home, vehicles, furniture, joint bank accounts, superannuation (KiwiSaver), and business interests acquired during the relationship.

2. What is Relationship Property?

The family home and contents (regardless of who paid for them).
Joint bank accounts, investments, and savings.
Vehicles, businesses, and income earned during the relationship.
KiwiSaver and other retirement funds accumulated during the relationship.
Any property purchased or acquired during the relationship.

3. What is Separate Property?

Property owned before the relationship began, unless it has been intermingled with relationship property.
Inheritances or gifts received by one partner (unless they have been shared or used for the benefit of both partners).
Compensation payments (e.g., ACC lump sum payments).

4. Exceptions to Equal Sharing

In some cases, the 50/50 rule does not apply, such as:

If the relationship lasted less than three years, division is based on contributions, not automatic 50/50.
If one partner made significantly greater contributions, the court may decide that an equal split is unfair.
If there are extraordinary circumstances that would make an equal division extremely unfair.

5. Relationship Property Agreements (Contracting Out Agreements)

Couples can create a contracting out agreement (prenup or postnup) to decide how their property will be divided in case of separation.
This must be in writing and signed by both parties with independent legal advice.

6. The Role of the Family Court

If the couple cannot agree, the Family Court can step in to decide how assets will be divided.
Mediation is often encouraged before going to court.

Would you like advice on a specific situation, such as KiwiSaver, business ownership, or debt division?

In New Zealand, the general rule is that relationship property is divided equally (50/50) under the Property (Relationships) Act 1976. However, in some cases, one person may receive more than the other. Here are key factors that could lead to an unequal division of assets:

1. Standard Equal Division (50/50 Split)

If the relationship lasted at least three years, the law assumes an equal contribution from both partners, regardless of who earned more money.
The family home and shared assets (such as vehicles, savings, and KiwiSaver contributions made during the relationship) are usually split equally.

2. When One Person May Get More

There are exceptions where one person may receive a greater share of assets:

(a) Relationships Under Three Years (Short-Term Relationships)

If a marriage, civil union, or de facto relationship lasted less than three years, assets are generally divided based on contributions, not necessarily 50/50.
The court considers financial contributions, child-rearing, and non-financial contributions (such as housework or supporting a partner’s career).

(b) Economic Disparity (Compensating an Unfair Situation)

If one partner is left in a significantly worse financial position after separation (e.g., a stay-at-home parent who has little income or career prospects), the court may award them a larger share.
This is called an economic disparity claim and is designed to compensate for financial disadvantages caused by the relationship.

If one person contributed significantly more to acquiring or improving assets (e.g., funded most of a business or paid off a mortgage while the other contributed little), the court might award them a greater share.
However, this is rare unless the contributions are extreme.

(d) Extraordinary Circumstances

If dividing assets 50/50 would be extremely unfair to one party, the court can order an unequal split.
This is a high threshold and only applies in rare cases.

3. How Separate Property Affects Asset Division

Separate property (assets owned before the relationship, inheritances, gifts, etc.) usually stays with the original owner unless it has been mixed with relationship property.
If one partner brought significantly more separate property into the relationship, they may leave with more assets overall.

4. Contracting Out Agreements (Prenups & Postnups)

If a couple signed a contracting out agreement (prenup), assets will be divided according to that agreement instead of the standard legal rules.

Who Gets the Most?

In most cases, assets are split equally (50/50).
If one partner is financially disadvantaged (e.g., due to career sacrifices), they may get more.