Family law paper welcomed

Mark Henaghan
Mark Henaghan
A raft of proposed changes to New Zealand's laws on the division of relationship property are welcome, a University of Otago family law specialist says - but extra safeguards are needed when it comes to people deliberately dropping their incomes and hiding property to avoid their obligations.

The Law Commission has released its preferred approach paper containing a list of proposed changes to the Property (Relationships) Act 1976.

Outgoing family law specialist Mark Henaghan said he "was not surprised at all'' by the preferred approach paper, which contains suggestions including the notion that the family home should no longer always be shared 50-50.

If one partner owned the home before the relationship, only the increase in value during the relationship should be shared.

Prof Henaghan said the approach paper appeared to have more provisions available to break open trusts, which was a positive step, as people hiding their relationship property in trusts was a long-standing problem.

Trust law was taking precedence over family property law, which was "unfair'', he said.

"I hope the remedies are very strong.''

Under new Family Income Sharing Arrangements (FISAs) proposed by the Law Commission, partners would be required to share their combined income for a limited period after they separate, to ensure the economic advantages and disadvantages from the relationship are shared more fairly.

Prof Henaghan said he hoped there would also be a process preventing partners from dropping their income so they were no longer providing as much support to their partner.

Although it was also detrimental to their own interests, it was conceivable people would do it.

"You wouldn't believe how spiteful people can be in these situations.''

The FISA was a good idea in principle, he said.

"Whether it's enough, I am not quite sure.''

There were plenty of people, such as farmers, who were asset-rich but had relatively low incomes, Prof Henaghan said.

"People will structure their lives [the way] they do for income tax. People find all sorts of ways to get around those things.''

The Law Commission will publish its final report on the Act in 2019.

elena.mcphee@odt.co.nz


 

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