Relationship Property Agreements

If your marriage, civil union or de facto relationship comes to an end by way of separation or death, you may be affected by the Property (Relationships) Act.

 While it may seem unromantic or pessimistic to discuss at the start of a relationship how property should be divided if you break up, anyone who enters into a new relationship should give the Property (Relationships) Act careful consideration.

The Property (Relationships) Act presumes that each partner makes an equal contribution to a relationship, even if that may be in different ways, and purports to make a just division (generally equal) of relationship property should the relationship come to an end. It applies to those who have been in a relationship described above for a minimum of three years.

However, a couple can come to their own agreement and make their own arrangements as to how they will divide their relationship property. This document is a Relationship Property Agreement also known as a Section 21 Agreement or Contracting Out Agreement. A Relationship Property Agreement can define a division of assets that you and your partner both agree upon. Preparing a Relationship Property Agreement essentially means you “contract out” of all, or part of the provisions of the Property (Relationships) Act.

 Any agreement must be in writing, and meet various legal requirements, including that each party obtains independent legal advice. You can prepare an agreement before you begin the relationship, during, or even when you are separating. Obtaining legal advice early on in the relationship will often save time, money and may reduce conflict.

At Dawsons we’ve made it simple and cost-effective for you to create your own Relationship Property Agreement through our online services. For a limited time you can prepare your own agreement through our website for only $380 incl. GST. Legal advice in respect of the agreement will be additional.

Alternatively, we are always available for advice if you would like to make an appointment to see us instead or you can give us a call on 09 272 0002.

Why might you need a Memorandum of Wishes?

Following on from our last blog on family trusts, this week the spotlight is on Memoranda of Wishes.

A Memorandum of Wishes is an additional document the settlor of a trust can create to indicate to the trustees their intentions of how they want the Trust to be managed. This Memorandum is read alongside the Trust Deed and enables a settlor to effectively give directions as to how the Trust should be administered, particularly after death.

In contrast to a Will, where executors do not have the power to make distributions of your personal property, trustees do have the power to determine how capital and income from a Trust are to be distributed (subject to powers in the Trust Deed). A Memorandum provides guidance in this respect.

Although a Memorandum of Wishes is not binding on trustees, they would be expected to give the Memorandum careful consideration as to the wishes of the settlor. Thereby a settlor could in the Memorandum provide guidance on:  

-       The purpose and reasoning behind establishing the Trust;

-       Who is intended to benefit from the Trust;

-       Trust distribution date;

-       Distribution of Trust income and capital; and

-       Any discretionary powers of trustees.

 Because Memoranda of Wishes are not legally binding on trustees, it is common for settlors to revise their memoranda on a regular basis to reflect any changing opinions as time goes by. Whether you have an established Trust, or you are looking to create one it is recommended to have a Memorandum of Wishes alongside your Trust.

The team at Dawsons are happy to assist in creating a new or updated Memorandum of Wishes, either by making an appointment or through our online legal services.

 

Disclaimer: The information on this page is general information only and must not be relied on as legal advice.

Setting up a family trust

Initial consultation offer:

Only $200 incl. GST for a 1 hour initial consultation

Family trusts have long been popular among kiwis, with an estimated 300,000 to 500,000 in New Zealand today. A family trust is a legal way of protecting property and managing your assets, for you or your family members for the future.

Who is involved?

The main parties to a trust are:

The settlor: the person (or people) who makes the initial transfer of property to the trustees of the trust.

The trustees: generally two or more people whom the settlor is confident in to manage the trust prudently. A settlor of a trust can also be a trustee of his or her own trust. In particular circumstances it might also be fitting to have a independent trustee, such as an accountant or lawyer.

The beneficiaries: the people whose benefit the trust is established for. Beneficiaries can be named individuals, or a class, such as “children”. There are generally two types of beneficiary, discretionary or final beneficiaries. Discretionary beneficiaries have a right to be considered for payment from the trust property by the trustees, whereas final beneficiaries have a legal right to trust property the date the trust finishes.

How is a trust created?

A trust is created when the settlor transfers the property to the trustees of the trust. This establishes a relationship whereby the trustees are legally obliged to manage the property in accordance with the purposes set out in a document known as a trust deed. Generally, one of the purposes is to hold the trust’s assets for the benefit of the beneficiaries of the trust. It is the duty of the trustees to act in the best interests of the beneficiaries.

There are many reasons why you might set up a trust, including:

  • To put aside money for a specific purpose - for example your children’s tertiary education when they come of age

  • To protect assets for family members - the transfer of ownership of certain assets can enable the settlor to pursue more high risk ventures knowing those assets won’t be put at risk if the settlor faces any personal liability and is pursued by creditors

  • To manage assets of a family member who is unable to mange their own financial affairs

  • To protect assets from potential relationship property claims

  • To change tax liability

Whether you are thinking of setting up a family trust, or want to get advice on the management of an existing family trust, the team at Dawsons can help with any related queries. We are running a limited time offer on initial family trust related consultation appointments for only $200 including GST, click below to book now!


Our top tips for business sale and purchase

Special consultation offer:

Only $200 incl. GST for a 1 hour initial consultation

Whether you are thinking of buying or selling a business, we understand these transactions can be complex. We work closely with our clients to achieve the best possible outcomes, and guide them through the process. Read on below to find out our top tips for preparing to sell, or buy a business.

How does the sale or purchase of a business work?

Ordinarily a business sale and purchase transaction can be carried out with the assistance of a business broker, or through a private agreement (without a broker). Either way, it is always recommended that a lawyer drafts or reviews the sale and purchase agreement and assists you with completing settlement. Buying or selling a business is a specialist area so it is important to get legal advice to ensure you get the best return on investment.

Our top tips for preparing your business for sale:

  • Consulting with your accountant to ensure your accounts and financial records are up to date and accurately reflect the businesses’ performance

  • Ensure key contracts such as leases and franchise agreements are properly documented and able to be assigned

  • Obtaining a valuation of your business

  • Seeking legal advice regarding the proposed terms of the agreement for sale and purchase

  • Consider what warranties will be given and any restraints of trade

  • Review any potential intellectual property matters

  • Engage a business broker who is familiar with your industry

Our top tips for purchasing a business:

  • Do your research of the business, market and industry

  • Find out why the business is for sale

  • Seek a professional representative for thorough advice and to enhance your credibility as a buyer

  • Conduct due diligence to understand what assets, liabilities and commercial potential the business has

  • Ask your accountant to go over the financial picture painted in the sales documents

  • Understand the value of the business in both goodwill and assets

  • Obtain legal advice to draw up a clear and watertight contract

With the end of the financial year coming up, many are considering selling their businesses. The team at Dawsons are happy to assist our clients through all aspects of the transaction, so get in touch now.

What happens if I lose the ability to make decisions for myself?

EPAs

Life can be uncertain, and there may come a time whether through illness or injury that you are unable to make decisions yourself. Therefore, it is important to plan ahead.

An Enduring Power of Attorney (EPA) enables you to appoint someone you trust to make decisions on your behalf, particularly if you are unable to do so yourself. These legal documents can protect your best interests and ensure you and your loved ones are being looked after.

There are two types of EPAs:

1.       Enduring Power of Attorney for Personal Care and Welfare – this EPA only comes into effect if you become ‘mentally incapable’ and enables your attorney to make medical or other related decisions about your care and welfare.

2.       Enduring Power of Attorney for Property – can come into effect before you become ‘mentally incapable’, and can cover a select number of things you own or everything you own.

Should you become mentally incapable before having an EPA in place, your loved ones may need to apply for a Family Court order. This can be a time consuming and costly process. Worse yet, the judge is reliant on the information provided to them and will not necessarily know who you trust or rely on to appoint as a decision maker.

Whether you would like your affairs looked after for a short or long while, the team at Dawsons can help you arrange your EPAs and give you peace of mind over decisions made about your property and personal care and welfare.

Do an EPA online now for only $240 (normally $400 including certification by a lawyer)

Disclaimer: The information on this page is general information only and must not be relied on as legal advice.

What Happens if I Die Without a Will?

Two important things to know, to avoid any future issues:

About 1,500 people die in New Zealand every year without a will - this is called dying “intestate”. What happens to your property if you haven’t left directions for how to distribute your assets?

1. The Court will appoint an Administrator of your Estate. Your loved ones would have to apply to the Court for administration, and this can take around six weeks for the High Court to process the application, or longer if the court is busy. This process is complicated, and more expensive than if you leave a Will.

Part of the process of getting the Court to appoint an Administrator includes:

  • Your loved ones proving to the Court that they have made a genuine effort to try to find a valid Will; and

  • That a search has been undertaken for any illegitimate children who may have a claim.

2.  The Court appointed Administrator will be required to distribute your assets to your next of kin in accordance with the Administration Act 1982 which might not be exactly what you wanted. It could mean that family members will benefit from your assets even if you do not want them to receive anything.

The good news is, it is easy to avoid these problems - by simply making a Will.

It doesn’t have to cost a lot, or take much time - but it’s worth doing to know your loved ones will be looked after in the way you intended, after you’re gone.

The team at Dawsons are happy to assist in creating a new or updated Will, either by making an appointment or through our online legal services.

Disclaimer: The information on this page is general information only and must not be relied on as legal advice.