21 Nov 2023

Divorce, remarriage, inheritance, and outdated laws

From The Detail, 5:00 am on 21 November 2023

Once upon a time it was assumed people married once and that was it. Times have changed but the laws governing divorce, remarriage and inheritance haven't. 

Groom's putting a wedding ring on the bride's finger

Photo: 123rf

No one wants to bring up the subject of a pre-nuptial agreement in the first flush of new relationship.

But by the time you're buying a house together, some sort of legal documentation could save a lot of heartache down the line, especially if the Bank of Mum and Dad has been involved. 

However, even if you get a mid-nup at that stage, or a contracting-out agreement, if it ends up challenged down the track, the whole thing can be ripped up by a court. 

The court can rule that an agreement has become seriously unjust, but it doesn't have the ability to tinker with that agreement to make it fairer – it's either thrown out, or upheld. 

There's no compulsory mediation – a process that could save tens of thousands in legal fees, and something that Auckland family lawyer Jeremy Sutton wants changed. 

"It gets very mucky and very expensive. What one is looking for here is simplicity. It's looking for people to be able to deal with their separation more easily emotionally and also on a time basis. 

"One of the things I'm in favour of is some sort of compulsory mediation shortly after separation to try and work things out. 

"There are still long delays in the court system since Covid, even though people have put a lot of resources into it, so an average sort of case takes about 14 months to resolve if it goes through the courts. And if it goes the full way through the courts it will take two or three years.

Auckland divorce lawyer Jeremy Sutton

Jeremy Sutton. Photo: Supplied

"It's tough for the parties but it's hardest for the children. The children get drawn into this dispute as well, they hear what's going on and it's detrimental to their mental health."

Of course the longer the parties fail to sort things out, he says, "the more they spend in legal fees, the more people feel invested, and they're not willing to compromise". 

The Family Court realms of divorce, inheritance, de facto relationship splits and mixed finances are ruled by laws cemented in 1976, and they're no longer considered good enough for some of the complex situations that arise now. 

There are updates to family law in the wind, but they haven't made it to the statute books.

The Law Commission has recommended 10 changes that have wide backing, and would make it easier to sort out disputes over assets such as family homes, the bach, and the farm.

Te Awamutu lawyer Chris Grenfell tells The Detail about the section of the law that allows people to come to their own agreements on relationship property and how it's resolved on separation, or on their death. It contracts out of the 50/50 property division under the law. 

"The Law Commission reviewed it, made a raft of recommendations to the government, and as of yet nothing has come of it," he says. 

"It's unfortunately like most law, a little bit behind the times of society ... similar to provisions when people die, law from the 1940s and 50s govern the bulk of that, so judges have had to interpret that as best they can within those constraints.

"It's an area that does need the government to step in to keep it current." 

The Detail also finds out more about the issues with the Bank of Mum and Dad when money has been loaned to a child for a property and then their relationship dissolves. 

"I think a lot of the time [people] don't think ahead to what can go wrong," says Grenfell. 

"There's an element of hoping for the best but not preparing for the worst."

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