Divorce - what is it good for?

By Telise Kelly - 9 Mar 2023

First thing's first: 'divorce' isn't really a thing in New Zealand. In legal terms, when you legally end a marriage in New Zealand you 'dissolve' it, and instead of getting divorce certificate, you can expect to receive a Dissolution Order from the Family Court.

When you decide to separate from your spouse in New Zealand, for the most part the date that you separate (known as the 'date of separation') constitutes the key date in terms of identifying and classifying your respective property interests. But parties must be separated for at least two years before they can dissolve their marriage and by then, many separated spouses have long resolved their relationship property issues.

So why bother dissolving your marriage?

There are four main reasons to dissolve your marriage, beyond simply tying up loose ends.

The first, relates to spousal maintenance. Spousal maintenance is a support payment from one spouse to another, which may be required where one spouse is unable to meet his or her reasonable financial needs after a separation. It is much more difficult (indeed, different criteria apply) for a former spouse to establish their right to maintenance, compared to an existing spouse. It is therefore beneficial, in terms of limiting exposure to maintenance payments, for the 'supporting' spouse to seek to dissolve the marriage as soon as possible.

The second, relates to claims against trust assets, under section 182 of the Family Proceedings Act 1980. If the parties have been married and their marriage has been dissolved, one party can invite the Family Court to enquire into the existence of any arrangements between the spouses as to trust property and seek to resettle (effectively divide) trust assets. Before the Family Court will make such an inquiry (and consider making any orders) it must first be satisfied that the marriage has been dissolved and that the trust is a "nuptial settlement". Without a dissolution of the marriage (or some other order concerning the marriage) the Court will not have jurisdiction. It follows that where one spouse has been 'locked out' of trust assets, a dissolution order becomes a key step to seeking a fair resettlement or division of those assets.

The third and an often-overlooked consequence of remaining married to someone who you separated from long ago, is that they may retain certain rights and standing to make claims against your estate, by virtue of simply and legally remaining your spouse. Under the default intestacy provisions of the Administration Act 1969, if you die intestate (that is, without a will or with a will which is partially ineffective) your 'spouse' would be entitled to receive the first $155,000 of your estate and one-third of the balance (if you have children). If you don't have children, your spouse receives all of your estate (that's right, 100%)!  Moreover, even if you have a valid will and all of your affairs in order, your long estranged but legal spouse will retain standing to challenge that will, under the Family Protection Act 1955, on the basis that they either deserve recognition and/or support from you and your estate, and your will has not provided for them sufficiently (or likely, at all). In many cases, such a claim would be considered weak, but that doesn't stop them from occurring from time to time.

Finally, it is also important to note that the time limit for filing relationship property proceedings is one year from the date of dissolution (in the case of married couples). For some parties, it may make sense to 'start the clock' on the time limit and reduce the possibility of a future claim against them by seeking a dissolution at their earliest opportunity.

Dissolving your marriage is a relatively easy procedure, because the only ground which can be relied upon is that the spouses have lived apart from more than two years, in other words, 'irreconcilable differences'. Our 'no fault' legal system means that the reason for separation is not even mentioned or considered when a dissolution of marriage is sought. Nor is dissolution linked to or conditional on any financial settlement (such as relationship property issues). Given the innocuous nature of the grounds to be relied on, many dissolution applications are now completed by the spouses jointly, with a registrar simply issuing the order upon receipt of an appropriate application (it is extremely rare that any attendance at Court is needed). That is because defending an application for dissolution is, in most cases, futile. The cost of applying for dissolution of a marriage is therefore very economic and easily estimated. On the other hand, failing to dissolve your marriage can have significant and expensive unintended consequences.

If or when you have been separated from your spouse for over two years, it really is time to end your legal marriage too. To consider if you have grounds to dissolve your marriage and obtain an estimate of costs for doing so, contact Telise Kelly.

It really pays to tie up those loose ends.