Q: My husband and I bought our home 20 years ago. We have now separated and are in the process of dividing our assets. It’s taking us a while to come to an agreement. I’m worried that if anything happens to me, he will inherit my interest in the home. I would rather leave my interest to my children from a previous relationship. Is there anything I can do before we reach a property settlement?
A: If the house is registered under both your names, you will probably own the home as joint tenants or tenants in common.
If you own the house as tenants in common, your share of the property will be specified on the title. For example “X and Y own the home jointly in equal shares”. If it is in your names with no mention of your respective shares, it is a joint tenancy.
What’s the difference?
If you own the home as tenants in common, you are entitled to leave your interest in the home to whomever you wish in your will. However, if you own the home as joint tenants, this is not the case. Under a joint tenancy, both and your husband will have a right of survivorship. This means if either of you die, the other becomes entitled to all the property. It does not matter if the deceased’s will says otherwise, because their interest in the home never becomes part of their estate.
A joint tenancy can be converted into a tenancy in common. You may do this without your husband’s permission. A conveyancing lawyer will transfer your interest in the home back to you. The title will then state that you own the home jointly in equal shares.
It is very important to update your will at the same time as this transfer. Once you own the home as tenants in common, you can specify in your will that your interest should pass to your children.
Q: I have some paintings that were given to me by my parents. Do they form part of the relationship property pool? We also bought a collection of vintage dolls together. Who gets to keep them? My ex purchased a $5000 electric bike just before we separated. He doesn’t think it is part of the pool. Is that right?
A: You received the paintings from your parents as a gift. Gifts will be considered your separate property unless they were used for the benefit of you and your partner. If the paintings were hung on the walls of your family home, they have become intermingled with other family chattels. Therefore, they will be considered part of the relationship property pool. If the paintings were never intermingled, for example, they were left in storage, then they will probably remain your separate property.
The collection of vintage dolls is relationship property as the dolls were acquired during your relationship. The value of the dolls will be shared equally between you and your partner. The value of family chattels is often measured by the amount that would be received if they were sold. However, any unique or high-value pieces may need to be valued.
Chattels can become a point of contention for partners separating. My advice is to take anything you would like to keep from the home when you leave it. It can be difficult to access the family home or to recover any chattels that are no longer in your possession. Replacing furniture and homewares can be very expensive so it is best to keep what you can.
The e-bike was purchased before separation. As it was purchased during the relationship, it will be included in the relationship property pool. However, if he purchased the bike from funds received as part of an inheritance, he may be able to argue that the bike is his separate property.
This article first appeared in the NZ Herald on the 10th of July 2020