By Surendra Bennett - 5 Apr 2018
The number of people divorcing aged
50+ is on the increase. These couples are sometimes referred to as
'Silver Splitters'. Life really can begin again at this age, where
you meet someone new and settle down once again. Life may be
wonderful during the honeymoon period and the thought that another
relationship might fail often never enters your mind. Discussions
around money and assets can be seen as unromantic and even
offensive!
However, at this age, you are likely to have far more assets and
a lot more at stake if a relationship does not work out. You most
likely have adult children and often grandchildren to think about.
And even if you aren't thinking about the impact on your assets if
your relationship ends, there is a high chance your children will
be.
It is prudent to engage in some asset planning, ideally before
you start living together or before you have been living together
for three years. You can enter into a Contracting Out Agreement
(also known as a pre-nup) at any time during your relationship. A
Contracting Out Agreement is vital if you and your new partner are
living together in the home which you owned before the
relationship. After three years of living together your partner is
entitled to claim half the house if you separate.
It is not necessary to be married to have a qualifying
relationship. De facto relationships are also covered under the
Property (Relationships) Act 1976. If you don't have a Contracting
Out Agreement in place and your relationship does not work out,
then your separation can result in your assets being divided in
half, perhaps for a second time (including pensions, superannuation
and KiwiSaver). This could have a dire effect on your lifestyle and
quality of life at a time when you should be enjoying your later
years. It can also have a significant effect on your ability to
leave funds to your children in your will.
In order to protect your assets, a Contracting Out Agreement
will ensure your assets remain your separate property in the event
of a separation or on your death.
In relation to your will, you have a legal obligation to ensure
that your spouse or de facto partner and your children (even if
they're adult) have been taken care of financially in the event of
your death. Leaving them out of the will is inviting a challenge
against your will and can have your family dealing with animosity
and years in court. This can be further complicated if your new
partner is significantly younger than you.
The wisest option would be to obtain legal advice for your
particular situation, know the options available and have open
discussions with your partner and family.
If you would like to know whether your relationship is
considered a de facto relationship under the law, or you would like
to enter into a Contracting Out Agreement, contact Surendra
Bennett from our specialist Family law team.