Relationship property lawyer Jeremy Sutton says the costs involved at the front end of a contract are a good investment towards resolving any dispute that might happen later.
A $17 million Lotto winner’s property dispute with a woman he had only known a short time has highlighted the need for caution after a big financial windfall.
Winner Mark Lipsham launched court proceedings against Kim Helmbright over $2.8 million – money he claimed he gave her to buy property on his behalf just eight weeks after meeting her. Instead, she spent the money buying two properties for herself.
Helmbright said the money was for the services she provided under a formal Freelancing Agreement and she was free to do with it whatever she wished.
Evidence produced in court showed the agreement was either cobbled together by Helmbright from examples she saw on the Internet or purchased by her from an online site for USD $29.95.
Lipsham did not deny signing the agreement but disputed the date on it, suggesting Helmbright backdated it and he had in fact paid her $70,000 for those services. The $2.8m was separate and for buying him the properties.
But, while the details remain confidential, the case serves as a reminder to others about the importance of legal documents.
Senior relationship property lawyer Jeremy Sutton hasn’t been involved with the case but advises anyone considering entering into any type of contract to ensure they get independent legal advice first.
He cautions against downloading legal documents from the internet, saying people need to spend money to protect themselves and ensure that if anything goes wrong, they have an agreed path of recourse they are happy with.
Sutton said a comprehensive relationship contract usually costs anywhere between $5000 and $15,000 but that’s a comparatively small sum for peace of mind especially when millions of dollars are at stake.
Lipsham won his $17 million in 2017.
He meet Helmbright in 2019 and in October of that year engaged her to provide him with a range of services the court described as “financial, property, personal and spiritual”.
During the following two months, he gave her the $70,000 he believed was for those services.
He said he gave her the $2.8 million on December 2 on the understanding it was for her to settle some real estate deals for him.
But instead, she bought properties in her own name – one at Waipapa near Kerikeri, for $1,675,000 in January 2020, and a property at Okaihau, near Kaikohe, for which she paid $660,000 in March 2020.
Lipsham now has a caveat over those properties preventing Helmbright from selling or transferring them.
Lipsham was given support after his big win but a Lotto spokeswoman said that didn’t extend to any legal or financial advice – something all big winners are urged to seek independently.
That support includes sitting down with winners in the first few days and hours to discuss the next steps like choosing who they tell, establishing priorities, setting up a timetable for action, and the importance of seeking independent financial advice.
“We also give practical support, like providing the details of private bankers at their bank to assist in those first days after their prize is paid and help work out a plan for the future,” the spokeswoman said.
“Ultimately, it is our winners’ decision how they manage their finances and legal affairs moving forward, but we do provide them with an early framework to help them get the best out of this once-in-a-lifetime experience.”
THINKING OF ENTERING INTO AN AGREEMENT?
– Get independent legal advice first.
– Be careful downloading legal documents from the Internet, you get what you pay for.
– A comprehensive relationship contract usually costs anywhere between $5,000 and $15,000. The costs involved at the front end of a contract are a good investment towards resolving any dispute that might happen later.
– A sound contract will have a cooling-off period. Parties should have time to consider any draft agreement before signing.
– The scope and duration of the contract should be clearly stated as should what will happen in the event of any dispute. It might also contain a confidentiality clause.
– Consider not only what is in the contract but importantly, what is not. If there is no alternative dispute resolution clause, it could allow one party to take the other directly to court, which can be an expensive, lengthy process.
This article originally appeared on the NZ Herald.
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