How to work out who gets what when a relationship breaks down
The Property (Relationships) Act 1976 provides for how property of married couples, civil union partners and de facto couples is divided when a relationship ends (including by breakdown or death).
When a relationship breaks down, relationship property disputes can be settled in two ways - either by agreement between the parties or through the Family Court.
Settling relationship property matters by agreement means the Family Court is not involved and parties come to an agreement themselves with or without the assistance from lawyers. Settling by agreement is far more effective in terms of time and money than the Court process. For these reasons I just about always encourage my clients to use this method if they can.
This is part 1 in a 3 part series to help explain the steps involved in reaching settlement and give you some tips to move forward.
4 STEPS TO SETTLEMENT
There are four key steps involved in settlement:
Step 1 – Disclosure / Information gathering
This step allows both parties to establish the total relationship property pool and create a list of assets and liabilities.
When you think about it, it makes sense that meaningful negotiation can't start unless both parties know what they are dealing with and have a full understanding of the details of what is in their relationship pool. This includes knowing what property is considered relationship property and what the value of the relationship property is. It can sometimes be hard to get the ball rolling on Step 1 and people tend to want to skip it thinking that it will just cause trouble.
From a legal perspective, without full disclosure, there is a real risk that whatever the parties agree to in negotiations will be challenged and set aside by the Court in the future. This could occur for example if it is later discovered that one party had hidden financial information (non-disclosure). Non-disclosure can lead to further legal costs and delays for both parties.
How to start the ‘disclosure’ process?
It is often best to confirm the start of this process in writing with one party requesting from the other party financial information or other details in respect of relationship property. You can do this using a lawyer, with the help of a lawyer checking your letter or on your own.
What “relationship property” covers
Relationship property covers things of financial value that were gained during the relationship. It can include:
These issues are explored in Part 2 of this series, so if you would like to know more, subscribe by clicking on the RSS Feed on the right.
Have you ever walked out in a daze after meeting with a lawyer? Was it English they were speaking? What was it they actually said about your problem? Was the only thing you understood, “Don’t worry, we will take care of it for you”, and then with confused relief you left your legal problem in their hands.
A few weeks later you get the bill but you still don’t really understand what work has been done AND why are you paying for photocopying and meetings and phone calls?
Well, the law is pretty complicated. There’s no doubt about that. It’s not always easy to navigate, and often only an experienced lawyer will know the best strategy to help you reach your goal. And, yes, paperwork is generated, even in my paperless office there is photocopying to be done. Meetings, research, reviewing documents and phonecalls are also vital tools of our trade.
And, yes, the traditional model is we do take care of you and you pay us to do that - we can try to keep our fees down but the analogy might be, you are flying first class, with all the tinsel and trimmings and not a care in the world (but for the bill).
But can’t there be a different way? What about those who prefer to, or simply have to, fly economy so to speak.
In my article of 7 December 2018 I talked about preventative law. This article is about an approach to law that is equally exciting. Around the world, it's called “Unbundled Law”, also known as limited scope or discrete task representation. Unbundled Law is where the lawyer and the client make an agreement to limit the scope of the lawyer's involvement in a legal matter down to specific tasks.
The New Zealand Law Society* explains the potential benefits to clients in using Unbundled Law as:
It simply stuns me the number of people who do not know what their legal documents say or do - and in some cases don’t even have a copy!
As for court cases, if you don’t know what your legal case is about how can you possibly make decisions about what to do next in it when you are asked by your lawyer for “instructions”?
An important point to make is you don't have to compromise quality with Unbundled Law, because ALL lawyers have professional obligations to their clients that are closely monitored and nowadays it's easy to do some homework and find out about your lawyer's experience and skills - just as you would with any other potential service provider.
There’s no doubt some people will always prefer the traditional legal model and thank goodness there are some great law firms in the region providing those services but more and more people are taking on assisted “DIY Law”.
At Comer Legal, we have developed a fixed fee framework so that clients can get the assistance they require as they require it. When work is completed, the client takes home all their own original documents for safekeeping or lodging – thus keeping control over their own legal matter. Electronic copies are kept by us and also provided by email to the client if requested. If we decide that a client might not be the right fit for Unbundled Law, quality referrals are made to traditional lawyers.
The key to the success of professional services is YOU the client.
More and more your choices matter when it comes to how services are delivered and that’s why Unbundled Law has a very important role to play right now and in the future in helping people access justice.
*Unbundled Guidelines - New Zealand Law Society 9 August 2017
In my November 2018 blog article, one of the 6 key Legal Tips I listed was to “Put it in Writing”. This article tells you why having great Terms and Conditions documented is so important.
When starting up a business, the last thing you want to think about is the worst case scenario but if you don’t put terms and conditions into writing you put yourself at risk of uncertainty and misunderstandings. You need to cover yourself.
Your Business Transparency
Having terms and conditions protects your business but other parties such as customers also need to know where they stand in dealing with you. Terms and conditions have a vital role to play when it comes to two parties (customer/supplier, partners) understanding their duties, rights, roles and responsibilities.
Terms and conditions can save a lot of money by addressing all issues at the outset. This in turn avoids disputes later on about what might or might not have been agreed. Apart from the cost, disputes damage business relationships and your valuable reputation.
What To Include In Terms And Conditions
Well-drafted terms should act like a manual for doing business and provide absolute clarity on what should happen in a given situation. They should set out what the agreed terms are between parties and what happens if things go wrong or one party wants to leave or is unable to continue.
The exact items your terms and conditions should include depend on your individual business but you should consider including:
Many businesses include their terms and conditions on the back of their invoice, but arguably by then, it’s too late. Payment Terms can certainly be re-stated on an invoice but Terms and Conditions should be provided at the outset of a business relationship. This can be done in a fairly brief, easy to adapt, format. It’s also a good idea to display your general terms and conditions on your website.
What Happens If Terms And Conditions Are Not Clear?
Failing to specify terms can have a serious impact on your cashflow and your business relationships. You may end up in a situation where the customer thinks they will pay at the end of service delivery and you think you are being paid at the beginning or in stages, so you could end up having to pay for materials and staff before you have received the money from the customer. Another common example is a misunderstanding can occur as to what is being supplied and when.
Also, if you do not specify your payment terms very clearly, customers may be confused as to when payment is due or you have will have no right to charge interest for late payment.
One Size Does Not Fit All
It’s important to make sure your terms are specifically written for your business – you can’t assume another business will have the same needs as yours.
Consult a lawyer and avoid the temptation to copy someone else’s terms as their business is different and they may not have consulted a lawyer themselves. Consider it an investment. If well drawn in the beginning, terms and conditions should need very little modification as time goes by.
4 Tips For Working Out What You Need To Include In Your Terms And Conditions
When in doubt, seek help. Ask for advice from your mentor, fellow business owners, your accountant and your lawyer.
What if basic Terms and Conditions are not enough?
Most businesses will be able to get by with short form standard contracts (Terms and Conditions) for the supply of goods and services. However, in some cases it may be preferable to have a more detailed and traditional contract in place. A lawyer will be able to advise you what would be the best approach for your business.
Note from the Author
I get plenty of time to think about legal matters while I am on the road.
This blog shares those thoughts and also answers some of the many questions people ask me. Hopefully there is something of interest to you. If there is a subject you would like covered then let me know!
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