50-50 Isn’t Always Fair – Addressing Financial Imbalances After Separating

When two people separate, there is often one person who is left in a more vulnerable position than the other. This can be, although is not always, the female in the relationship, and is often as a result of taking time out from work/career to have and raise children and support the family unit.

Often people come to us for initial advice as they have been cut off from the family finances or are afraid they are going to be. This can be because their partner has had more control over the finances during the relationship – either because they have more financial knowledge or because they earned the most during the relationship (or both).

One barrier commonly faced after separation because of this is that person’s ability to access funds so that they can pay for their day to day needs and those of their children. This includes access to necessary legal advice to help them through what is often a complex situation and where they may not have access to financial information and documentation.

Many people are not aware that there are urgent remedies that can be obtained in the Family Court to give them access to sufficient funds to meet their reasonable needs, including legal costs. That is, where there are relationship assets that can be accessed for this purpose. Other options are also available for the payment of legal costs where there are assets owned personally and on the basis that repayment occurs on settlement.

There are claims that can be made where a partner does not have sufficient income to meet their reasonable needs (spousal maintenance) and where their ex-partner’s income and living standards are likely to be significantly higher than theirs because of the effects of the division of functions within the relationship (economic disparity). Both of those types of claims are complex and expert legal advice is required.

In those situations, the ex-partner will often still propose the relationship assets are divided on a 50-50 basis and pitch this as an ‘amicable division’. However, this would be unjust where, for example, the parties are not on equal footing due to decisions made during the relationship for the benefit of the family and/or where one of them will have primary responsibility for the care of children post-separation. It is therefore important to obtain expert legal advice to ensure that you are not short-changing yourself and you receive what you are entitled to as part of your relationship asset division.

If this sounds like you, please get in touch and we can talk about some options for addressing the financial and power imbalance between you and your ex-partner both prior to and as part of your relationship property settlement.

Manawa Farquhar is the Director of our Relationship Property and Family Teams and can be contacted on Manawa.Farquhar@harristate.co.nz and (07) 926 6027.