Investments, Gifts And Business Interests

This article is part of our demystifying separation series. For more updates, click here.

What impact does separation have on my or our business interests?

Separation can impact your business interests. For example, if you have shares in a company that you have acquired during your relationship, your ex-partner is presumed to have an equal entitlement to them when you separate. This applies even though your ex-partner may have had nothing to do with the business.

Sometimes business interests you had before your relationship may also be relationship property at the end of a relationship. For example, if you have contributed any of your own income or savings accumulated during the relationship to the business, the increase in value to the business by that contribution will be considered relationship property.

• Contributions to a business can be non-financial as well. If, for example, you owned a company and your ex-partner assisted you by providing administration support or managing the books, their contributions can be counted as a contributions increasing the value of the business.
• Entitlements do not extend to the company’s property (e.g. any company vehicles or real estate). Property legitimately owned by the business remains the property of the business, and is not able to be divided in a separation agreement.
• If you and your ex-partner are in business together, you will need to consider what will happen when the relationship ends. Will you carry on as business partners? Will you sell either or both of your shares? Will you buy out your ex-partner’s interest in the business?

It is important to work out what the value of the company shares are so you can work out how to deal with them on separation. To do this you will likely need to obtain an independent valuation. For more information on why valuations are important, see our article here.

Do I get to keep my Kiwisaver, inheritance, or gifts given to me during the relationship?

The general rule is that the property you received during the relationship is divided equally when you separate. Contributions to your kiwisaver during a relationship are made from your income, which is relationship property. Therefore, your partner will have an equal entitlement to those contributions and any increase in value of your Kiwisaver from those contributions.

There are some exclusions, including:

• The value of your kiwisaver before you entered a relationship with your partner is not presumed to be relationship property. If you have been contributing to your kiwisaver for several years before you entered a relationship, this may not be included in the calculation of relationship property.
• Gifts given to you personally are not included. Gifts remain your separate property.
• Family heirlooms or taonga are not relationship property.
• If you received an inheritance, that remains your separate property.

However, be aware that the situation can change depending on how your property is used. For example, you may use your kiwisaver funds which you accumulated before your relationship to purchase a property with your partner which becomes the family home. In another example, you may use inheritance money to purchase items for the relationship, such as furniture or a family holiday. That could transform that portion of the inheritance into relationship property.

A lawyer can help you understand your entitlements. Lawyers can also help you and your ex-partner come to an agreement on how to classify certain property when you separate.

If you need tailored legal advice regarding any of the matters we discuss in these articles, get in contact with a member of our team: Ruth Williams, Jaesen Sumner.