The Ministry of Social Development reviews all claims for a Rest Home Subsidy. You are eligible if you meet the following criteria: your assets are below the allowable threshold; your income is below the allowable amount; and you have not deprived yourself of assets for example transferred a property to a trust. Currently the threshold for a single person living alone is a maximum of $230,495.00 in cash or assets. If you have a spouse or partner who is also in care your combined assets cannot be more than $230,495.00.
If your spouse or partner is not in care the combined assets can be either of $124,224.00 excluding the home and car; or $230,495.00 including the home and car. If the home is the main place of residence for your spouse or partner or there is a dependent child living there then the home and car are exempt.
Gifting of $6,500.00 per couple per year is allowed in the five years before going into care and $27,000.00 per year per couple outside of that time frame. Anything over those limits is considered as excess gifting and can be overturned by the Ministry.
If you’ve previously owned a property but didn’t withdraw your KiwiSaver at the time, you may still be still be able to use it towards the purchase of your second property.
To find out if you’re eligible, the first thing your KiwiSaver provider will need to see is approval from Kāinga Ora (previously Housing New Zealand).
To get approved by Kāinga Ora, you will need to fill out an application on their website. The application will look at a number of criteria to determine if you are in the same position as a first home buyer. Something to note is that the property you are purchasing must be for you to live in and not to rent out.
Once you have approval, you can then apply to withdraw your KiwiSaver (ask your provider how to do this or have a look on their website) and submit your Kāinga Ora approval as part of the withdrawal application.
If you’ve found a property you like, you should tell the Real Estate Agent you’d like to make an offer on the property. They will then ask you what purchase price you’d like to offer, how much deposit will you put down, what conditions you’d like to include, the timeframes for any conditions and what day you’d like to move in (settlement day).
They will then prepare an Agreement for Sale and Purchase (this is the offer). You should get us to check this before you sign it to make sure you are covered for your particular situation and to do a property check.
Once you are happy, you can sign the Agreement and the Real Estate Agent or Lawyer will send the Agreement to the Sellers to review and either accept, by signing the Agreement as well, or deny in which case you will be notified of their decision.
KiwiSaver is a voluntary retirement savings scheme but can be withdrawn early under certain circumstances – such as purchasing your first home, moving overseas indefinitely, or in cases of extreme hardship – provided you have been contributing to your KiwiSaver for a minimum of 3 years.
You need to contact your KiwiSaver provider directly who will let you know whether you are eligible to apply for an early withdrawal, whether you are pre-approved (and to what amount) and explain exactly what you need to do to withdraw the funds. Most providers usually require:
- A completed KiwiSaver withdrawal form (on the provider’s prescribed form);
- A statutory declaration (signed in the presence of your lawyer or other person authorised to take statutory declarations);
Certified ID and proof of address; - A bank deposit slip for your lawyer’s trust account;
- A copy of the sale and purchase agreement; and
- A letter of undertaking signed by your solicitor to appropriate the funds toward your purchase, or, if settlement does not go ahead, to repay you KiwiSaver funds to the provider.
Depending on your circumstances, such as whether you’ve lived overseas, other documents may be required. Most KiwiSaver providers take fifteen working days to process applications, so it is important to bear this timeframe in mind when you are choosing a finance condition and settlement date.
When you start to look around at potential houses to buy, it’s a good idea to also start getting your pre-approval sorted. This means firstly talking to your bank or mortgage broker to let them know that you are looking around.
The bank or lender will ask you a number of questions about your income and how much you will be personally contributing towards the purchase. They might then issue you a pre-approval for a loan for a property. The pre-approval will tell you how much you are able to lend from them but the pre-approval will likely be subject to conditions. These conditions could include paying off your credit-card or car loan or getting a valuation on the property.
Until all the conditions on your pre-approval are satisfied, you will not be able to confirm your finance. This means that when you’d like to make an offer on a property, you will likely need to include a finance condition with your offer even though you may already have pre-approval from your bank. Most banks will still need to see that your offer has been accepted by the Seller before they will confirm your loan approved.
This is the day everyone is waiting for in anticipation – the moving trucks are ready and waiting, the celebratory drinks are chilled ready to crack open but there are still a few things that need to happen first and this is why we often do not ring you at 9am to say settlement is complete and you can start to move as we are working hard behind the scenes to make settlements happen.
It is difficult for us to predict what time settlement will occur and you can spend a large part of the day waiting for that all important phone call from us. In the event of delays we will keep you informed of progress. And don’t forget to take some photos of your moving day as it’s a great memory to have for both selling and buying a house.
We are often waiting to receive bank funds – these funds can arrive anytime from first thing to 4pm so this can play a big part in when we can settle. We also cannot settle until the vendor’s solicitor has advised they are ready – called an undertaking. Once we have received the vendors undertaking, we pay the settlement funds by a Same Day Cleared payment directly into the vendor’s solicitor Trust Account and give our undertaking to the vendor’s solicitor that the payment will not be altered, withdrawn or reversed.
Once the vendors solicitor has received the undertaking they release the record of title to us and authorises the agent to release the keys. We ring you with the exciting news you have bought a property! You collect the keys from the agent and move into your new home and start celebrating! We will email you a reporting letter with a copy of your S and P Agreement, Record of Title, Statement, our invoice and other additional information.
We advise packing a small box of essentials you may need on the first day in case settlement gets delayed and you end up moving in late in the day, things like toilet paper, towels, tea towels, washing up liquid, soap, lightbulbs, phone chargers, extension chord, kitchen jug, snacks, drinks, a few glasses/cups/plates enough to get you sorted for the first day as it can take you a while to unpack all the boxes!
This is the day everyone is waiting for in anticipation – the moving trucks are ready and waiting, the celebratory drinks are chilled ready to crack open but there are still a few things that need to happen first and this is why we often do not ring you at 9am to say settlement is complete and you can start to move as we are working hard behind the scenes to make settlements happen.
It is difficult for us to predict what time settlement will occur and you can spend a large part of the day waiting for that all important phone call from us. In the event of delays we will keep you informed of progress. And don’t forget to take some photos of your moving day as it’s a great memory to have for both selling and buying a house.
If you have a mortgage against your property to repay on settlement day we will be waiting to get the full repayment statement from your Bank with what we will need to repay on your behalf. This amount cannot usually be confirmed until the day of settlement because interest is payable up to the settlement date.
Once we are ready to settle, we send our undertaking to the purchasers solicitor. That undertaking confirms that we will repay the bank and discharge the mortgage from the Record of Title, and release the clear title to the purchaser’s solicitor so that they can register the transfer into their clients’ name. The purchaser’s solicitor pays us the settlement funds by a Same Day Cleared payment directly into our Trust Account and provide their undertaking that the payment will not be altered, withdrawn or reversed.
We ring you with the exciting news you have sold your property! We also ring the Real Estate Agent to let them know to release the keys. We release the Record of Title to the purchaser’s solicitor to transfer to their client. We email you our reporting letter with a copy of your S and P Agreement, Bank Repayment info (if you had a mortgage), Statement, our invoice and other additional information.
We recommend leaving the new purchasers some information about the property such as paint colours, rubbish days, an address for forwarding any mail. Any spare keys can be locked in the house as the agent usually has a key to give to the purchaser. Please make sure that you leave the property in a clean and tidy condition, and remove all rubbish – this often results in unnecessary delays on settlement day.
Although we check the Daily News death notices daily, we also rely on family members notifying us when someone has died because death notices are not always put in the paper. If the deceased has assets over $15,000.00 in value and/or an interest in land then Probate will need to be obtained through the High Court if the deceased has a will, or Letters of Administration will be required if the deceased does not have a will. This enables the estate to be administered.
An initial meeting is held with the family to ascertain the level of assets and to get the relevant documentation signed. Once Probate/Letters of Administration is granted then we are able to collect in the assets – close bank accounts, uplift KiwiSaver and Life Insurance proceeds etc.
Estates are generally not distributed until a minimum of 6 months has elapsed from the date Probate/Letters of Administration has been granted in case anyone makes a claim against the estate and to ensure that creditors are all paid.
Basic information required is your full name (including any other names you are known by) your occupation and address; who you would like to appoint as your executor – the person who steps into your shoes when you are no longer here; if you have children – who you appoint as guardian for them; any specific gifts for example donations to a charity, family heirlooms, jewellery etc; and who you would like to inherit your estate. We will ask for the full name, address and occupation of the person or people you are appointing as your executor and the full names and ages of your children.
If you own a house with your spouse, partner or significant other as joint tenants the house will automatically transfer to the survivor without needing Probate of your will. If that house is owned as tenants in common – most often half shares each – then you will leave a life interest to your spouse, partner or significant other. That life interest can be for the remainder of the life of that person, or can have a time limit for example 2, 5, 10 years.
It is important to make sure your new valuable asset is protected. When you find a property you are interested in, you should check whether the house is currently insured, and whether there have been any incidents that could affect future insurance of the property. Things to consider and things your insurance provider will want to know include the age of the property, size, previous claims and incidents, compliance and consents for any additions and work, and what materials the property is made of.
Also, if you have a mortgage, your lender will usually require you to at least have adequate buildings cover in place until you have repaid the mortgage. Your insurance policy will need to cover you from the day you own the property, even if you aren’t moving in on that day. Many lenders require insurance that covers fire, flood, other natural disasters to a level that covers costs of a complete rebuild of the property. They will also usually require you to list them as an interested party on that insurance policy. Therefore, it is useful to speak to a registered valuer or property surveyor who can help ensure you are paying for the right amount of insurance cover for that property.
A contracting out agreement (sometimes known as a “prenuptial” agreement – or “pre-nup”) enables couples to contract out of the Property (Relationships) Act (“the Act”) and enter into their own private agreement to determine the status, ownership and division of their property upon separation or death. You can enter into a contracting out agreement at any time: upon entering a relationship, during it, or at the end of the relationship, however it is advisable to do so prior to your relationship reaching the two-year mark.
There are important requirements that must be complied with, as stipulated under s 21F of the Act, if the agreement is to be valid:
- The agreement must be in writing and signed by both parties.
- Each party must get independent legal advice from separate lawyers, prior to signing the agreement.
- The signature of each party to the agreement must be witnessed by their lawyer.
- The lawyer who witnesses someone’s signature must also certify that, before the person signed the agreement, the lawyer explained to that person the effect and implications of the agreement.
When you first make on offer on a property, you will be asked what you’d like to put down as a deposit. To make it confusing, there are two definitions of ‘deposit’ you will come across when you are in the home purchase process.
The first is the ‘deposit’ that the bank will ask of you. Here they are asking how much you money you will be ‘putting into’ your home or how much are you personally contributing that is not loaned from the bank.
The deposit the Real Estate Agent or lawyer is talking about is the one in the Agreement for Sale and Purchase. This means how much of the total purchase price you’d like to pay to the Seller of the property as a sign of good faith before settlement day.
Normally, you will pay this deposit once all of the conditions you have agreed on when you made your offer have been satisfied. This is when the property goes unconditional.
You can choose any amount as your deposit, 10% of the purchase price is the usual amount, but the amount you choose may be dependent on what you will have available before settlement day.
A LIM or Land Information Memorandum is all the information that the local Council holds on the property to date. It is important to include the LIM report condition as information (or lack of) that the Council holds may affect your use and enjoyment of your new home and it can be hard, or impossible, to change once you’ve moved in.
When you receive a LIM you should first look at the plan of the house, make sure it still looks the same as the property now or make sure that any additional works, such as bathrooms, conservatories and garages, have been issued a Code of Compliance by the Council.
The LIM also contains information of any flooding, erosion, weathertightness issues, zoning, heritage buildings, protected trees, rates owing, claims or notices by other organisations over the property and any other information that the council thinks is relevant.
In the event of separation it is advisable to instruct a lawyer. Even in circumstances where the separation may be amicable, a lawyer can provide valuable advice on a range of matters from care arrangements for any children of the relationship and immediate relationship property tasks such as safeguarding joint bank accounts. In order to finalise a division of relationship property, the Property (Relationships) Act 1976 sets out a list a requirements with which an agreement must comply in order for it to be valid under law.
Two of these requirements are that the written agreement must be witnessed by a lawyer and furthermore each parties’ lawyer must also certify that the effect and implications of the agreement have been explained to the parties to the agreement. To apply for a dissolution of marriage order, parties need to have been separated for at least two years.
There is often a negative connotation attached to contracting out agreements, however this need not be the case as there are many worthy reasons to consider a contracting our agreement. For some individuals, who have obtained significant assets or monetary funds prior to the commencement of a new relationship, a contracting out agreement provides protection from equal sharing in the event of a relationship breakdown in the future. Other couples may find themselves in a newly merged family, and wish to use a contracting out agreement to fulfill obligations to their own children in the event of death.
Contracting-out agreements do not need to exclude any sharing of property and are instead a tool to make things fair. Entering into a contracting-out agreement is a way of recognising a new relationship with the intent of providing clear expectations as to how assets should be divided in the event of separation and/or death in the future. Some people may have previously used trusts for the same purposes as a contracting-out agreement, however recent cases have shown that the security of a trust only for a contracting-out agreement is limited.
People who are eligible for KiwiSaver are New Zealand citizens or people entitled to live (or normally live) in New Zealand. The KiwiSaver scheme is designed as a long-term investment to help you save for your retirement. That is why generally, you cannot access your KiwiSaver until you are 65, however, you may be eligible for early withdrawal for one of the following reasons:
- First home purchase (or second home, with exceptions)
- Permanent relocation overseas
- Significant financial hardship
- Serious illness
- Life-shortening congenital condition
You will need to speak to your KiwiSaver provider directly to check that you are eligible to withdraw early for one of the above reasons and to get pre-approval.
A building report should be included as a condition as it may reveal hidden problems with a property that may have been causing deterioration over time or something that requires fixing urgently. If not discovered, you could face huge bills to fix the issues shortly after moving in and have difficulty trying to get the old owner to pay up.
A building report must be in writing and carried out by a ‘suitably qualified builder’. Just getting ‘your mate’ to come and check out the property won’t work if you want to make any claims.
If any issues arise from the report, you can negotiate with the owner of the property for these to be taken care of before you move in or you have a safe way out of the purchase if it’s something major. The report will also help identify any upcoming maintenance due for you to keep in mind.
If you’ve previously owned a property but didn’t withdraw your KiwiSaver at the time, you may still be still be able to use it towards the purchase of your second property.
To find out if you’re eligible, the first thing your KiwiSaver provider will need to see is approval from Kāinga Ora (previously Housing New Zealand).
To get approved by Kāinga Ora, you will need to fill out an application on their website. The application will look at a number of criteria to determine if you are in the same position as a first home buyer. Something to note is that the property you are purchasing must be for you to live in and not to rent out.
Once you have approval, you can then apply to withdraw your KiwiSaver (ask your provider how to do this or have a look on their website) and submit your Kāinga Ora approval as part of the withdrawal application.
If you’ve found a property you like, you should tell the Real Estate Agent you’d like to make an offer on the property. They will then ask you what purchase price you’d like to offer, how much deposit will you put down, what conditions you’d like to include, the timeframes for any conditions and what day you’d like to move in (settlement day).
They will then prepare an Agreement for Sale and Purchase (this is the offer). You should get us to check this before you sign it to make sure you are covered for your particular situation and to do a property check.
Once you are happy, you can sign the Agreement and the Real Estate Agent or Lawyer will send the Agreement to the Sellers to review and either accept, by signing the Agreement as well, or deny in which case you will be notified of their decision.
KiwiSaver is a voluntary retirement savings scheme but can be withdrawn early under certain circumstances – such as purchasing your first home, moving overseas indefinitely, or in cases of extreme hardship – provided you have been contributing to your KiwiSaver for a minimum of 3 years.
You need to contact your KiwiSaver provider directly who will let you know whether you are eligible to apply for an early withdrawal, whether you are pre-approved (and to what amount) and explain exactly what you need to do to withdraw the funds. Most providers usually require:
- A completed KiwiSaver withdrawal form (on the provider’s prescribed form);
- A statutory declaration (signed in the presence of your lawyer or other person authorised to take statutory declarations);
Certified ID and proof of address; - A bank deposit slip for your lawyer’s trust account;
- A copy of the sale and purchase agreement; and
- A letter of undertaking signed by your solicitor to appropriate the funds toward your purchase, or, if settlement does not go ahead, to repay you KiwiSaver funds to the provider.
Depending on your circumstances, such as whether you’ve lived overseas, other documents may be required. Most KiwiSaver providers take fifteen working days to process applications, so it is important to bear this timeframe in mind when you are choosing a finance condition and settlement date.
When you start to look around at potential houses to buy, it’s a good idea to also start getting your pre-approval sorted. This means firstly talking to your bank or mortgage broker to let them know that you are looking around.
The bank or lender will ask you a number of questions about your income and how much you will be personally contributing towards the purchase. They might then issue you a pre-approval for a loan for a property. The pre-approval will tell you how much you are able to lend from them but the pre-approval will likely be subject to conditions. These conditions could include paying off your credit-card or car loan or getting a valuation on the property.
Until all the conditions on your pre-approval are satisfied, you will not be able to confirm your finance. This means that when you’d like to make an offer on a property, you will likely need to include a finance condition with your offer even though you may already have pre-approval from your bank. Most banks will still need to see that your offer has been accepted by the Seller before they will confirm your loan approved.
This is the day everyone is waiting for in anticipation – the moving trucks are ready and waiting, the celebratory drinks are chilled ready to crack open but there are still a few things that need to happen first and this is why we often do not ring you at 9am to say settlement is complete and you can start to move as we are working hard behind the scenes to make settlements happen.
It is difficult for us to predict what time settlement will occur and you can spend a large part of the day waiting for that all important phone call from us. In the event of delays we will keep you informed of progress. And don’t forget to take some photos of your moving day as it’s a great memory to have for both selling and buying a house.
We are often waiting to receive bank funds – these funds can arrive anytime from first thing to 4pm so this can play a big part in when we can settle. We also cannot settle until the vendor’s solicitor has advised they are ready – called an undertaking. Once we have received the vendors undertaking, we pay the settlement funds by a Same Day Cleared payment directly into the vendor’s solicitor Trust Account and give our undertaking to the vendor’s solicitor that the payment will not be altered, withdrawn or reversed.
Once the vendors solicitor has received the undertaking they release the record of title to us and authorises the agent to release the keys. We ring you with the exciting news you have bought a property! You collect the keys from the agent and move into your new home and start celebrating! We will email you a reporting letter with a copy of your S and P Agreement, Record of Title, Statement, our invoice and other additional information.
We advise packing a small box of essentials you may need on the first day in case settlement gets delayed and you end up moving in late in the day, things like toilet paper, towels, tea towels, washing up liquid, soap, lightbulbs, phone chargers, extension chord, kitchen jug, snacks, drinks, a few glasses/cups/plates enough to get you sorted for the first day as it can take you a while to unpack all the boxes!
This is the day everyone is waiting for in anticipation – the moving trucks are ready and waiting, the celebratory drinks are chilled ready to crack open but there are still a few things that need to happen first and this is why we often do not ring you at 9am to say settlement is complete and you can start to move as we are working hard behind the scenes to make settlements happen.
It is difficult for us to predict what time settlement will occur and you can spend a large part of the day waiting for that all important phone call from us. In the event of delays we will keep you informed of progress. And don’t forget to take some photos of your moving day as it’s a great memory to have for both selling and buying a house.
If you have a mortgage against your property to repay on settlement day we will be waiting to get the full repayment statement from your Bank with what we will need to repay on your behalf. This amount cannot usually be confirmed until the day of settlement because interest is payable up to the settlement date.
Once we are ready to settle, we send our undertaking to the purchasers solicitor. That undertaking confirms that we will repay the bank and discharge the mortgage from the Record of Title, and release the clear title to the purchaser’s solicitor so that they can register the transfer into their clients’ name. The purchaser’s solicitor pays us the settlement funds by a Same Day Cleared payment directly into our Trust Account and provide their undertaking that the payment will not be altered, withdrawn or reversed.
We ring you with the exciting news you have sold your property! We also ring the Real Estate Agent to let them know to release the keys. We release the Record of Title to the purchaser’s solicitor to transfer to their client. We email you our reporting letter with a copy of your S and P Agreement, Bank Repayment info (if you had a mortgage), Statement, our invoice and other additional information.
We recommend leaving the new purchasers some information about the property such as paint colours, rubbish days, an address for forwarding any mail. Any spare keys can be locked in the house as the agent usually has a key to give to the purchaser. Please make sure that you leave the property in a clean and tidy condition, and remove all rubbish – this often results in unnecessary delays on settlement day.
When you first make on offer on a property, you will be asked what you’d like to put down as a deposit. To make it confusing, there are two definitions of ‘deposit’ you will come across when you are in the home purchase process.
The first is the ‘deposit’ that the bank will ask of you. Here they are asking how much you money you will be ‘putting into’ your home or how much are you personally contributing that is not loaned from the bank.
The deposit the Real Estate Agent or lawyer is talking about is the one in the Agreement for Sale and Purchase. This means how much of the total purchase price you’d like to pay to the Seller of the property as a sign of good faith before settlement day.
Normally, you will pay this deposit once all of the conditions you have agreed on when you made your offer have been satisfied. This is when the property goes unconditional.
You can choose any amount as your deposit, 10% of the purchase price is the usual amount, but the amount you choose may be dependent on what you will have available before settlement day.
A LIM or Land Information Memorandum is all the information that the local Council holds on the property to date. It is important to include the LIM report condition as information (or lack of) that the Council holds may affect your use and enjoyment of your new home and it can be hard, or impossible, to change once you’ve moved in.
When you receive a LIM you should first look at the plan of the house, make sure it still looks the same as the property now or make sure that any additional works, such as bathrooms, conservatories and garages, have been issued a Code of Compliance by the Council.
The LIM also contains information of any flooding, erosion, weathertightness issues, zoning, heritage buildings, protected trees, rates owing, claims or notices by other organisations over the property and any other information that the council thinks is relevant.
People who are eligible for KiwiSaver are New Zealand citizens or people entitled to live (or normally live) in New Zealand. The KiwiSaver scheme is designed as a long-term investment to help you save for your retirement. That is why generally, you cannot access your KiwiSaver until you are 65, however, you may be eligible for early withdrawal for one of the following reasons:
- First home purchase (or second home, with exceptions)
- Permanent relocation overseas
- Significant financial hardship
- Serious illness
- Life-shortening congenital condition
You will need to speak to your KiwiSaver provider directly to check that you are eligible to withdraw early for one of the above reasons and to get pre-approval.
A building report should be included as a condition as it may reveal hidden problems with a property that may have been causing deterioration over time or something that requires fixing urgently. If not discovered, you could face huge bills to fix the issues shortly after moving in and have difficulty trying to get the old owner to pay up.
A building report must be in writing and carried out by a ‘suitably qualified builder’. Just getting ‘your mate’ to come and check out the property won’t work if you want to make any claims.
If any issues arise from the report, you can negotiate with the owner of the property for these to be taken care of before you move in or you have a safe way out of the purchase if it’s something major. The report will also help identify any upcoming maintenance due for you to keep in mind.
The Ministry of Social Development reviews all claims for a Rest Home Subsidy. You are eligible if you meet the following criteria: your assets are below the allowable threshold; your income is below the allowable amount; and you have not deprived yourself of assets for example transferred a property to a trust. Currently the threshold for a single person living alone is a maximum of $230,495.00 in cash or assets. If you have a spouse or partner who is also in care your combined assets cannot be more than $230,495.00.
If your spouse or partner is not in care the combined assets can be either of $124,224.00 excluding the home and car; or $230,495.00 including the home and car. If the home is the main place of residence for your spouse or partner or there is a dependent child living there then the home and car are exempt.
Gifting of $6,500.00 per couple per year is allowed in the five years before going into care and $27,000.00 per year per couple outside of that time frame. Anything over those limits is considered as excess gifting and can be overturned by the Ministry.
Although we check the Daily News death notices daily, we also rely on family members notifying us when someone has died because death notices are not always put in the paper. If the deceased has assets over $15,000.00 in value and/or an interest in land then Probate will need to be obtained through the High Court if the deceased has a will, or Letters of Administration will be required if the deceased does not have a will. This enables the estate to be administered.
An initial meeting is held with the family to ascertain the level of assets and to get the relevant documentation signed. Once Probate/Letters of Administration is granted then we are able to collect in the assets – close bank accounts, uplift KiwiSaver and Life Insurance proceeds etc.
Estates are generally not distributed until a minimum of 6 months has elapsed from the date Probate/Letters of Administration has been granted in case anyone makes a claim against the estate and to ensure that creditors are all paid.
Basic information required is your full name (including any other names you are known by) your occupation and address; who you would like to appoint as your executor – the person who steps into your shoes when you are no longer here; if you have children – who you appoint as guardian for them; any specific gifts for example donations to a charity, family heirlooms, jewellery etc; and who you would like to inherit your estate. We will ask for the full name, address and occupation of the person or people you are appointing as your executor and the full names and ages of your children.
If you own a house with your spouse, partner or significant other as joint tenants the house will automatically transfer to the survivor without needing Probate of your will. If that house is owned as tenants in common – most often half shares each – then you will leave a life interest to your spouse, partner or significant other. That life interest can be for the remainder of the life of that person, or can have a time limit for example 2, 5, 10 years.
A contracting out agreement (sometimes known as a “prenuptial” agreement – or “pre-nup”) enables couples to contract out of the Property (Relationships) Act (“the Act”) and enter into their own private agreement to determine the status, ownership and division of their property upon separation or death. You can enter into a contracting out agreement at any time: upon entering a relationship, during it, or at the end of the relationship, however it is advisable to do so prior to your relationship reaching the two-year mark.
There are important requirements that must be complied with, as stipulated under s 21F of the Act, if the agreement is to be valid:
- The agreement must be in writing and signed by both parties.
- Each party must get independent legal advice from separate lawyers, prior to signing the agreement.
- The signature of each party to the agreement must be witnessed by their lawyer.
- The lawyer who witnesses someone’s signature must also certify that, before the person signed the agreement, the lawyer explained to that person the effect and implications of the agreement.
In the event of separation it is advisable to instruct a lawyer. Even in circumstances where the separation may be amicable, a lawyer can provide valuable advice on a range of matters from care arrangements for any children of the relationship and immediate relationship property tasks such as safeguarding joint bank accounts. In order to finalise a division of relationship property, the Property (Relationships) Act 1976 sets out a list a requirements with which an agreement must comply in order for it to be valid under law.
Two of these requirements are that the written agreement must be witnessed by a lawyer and furthermore each parties’ lawyer must also certify that the effect and implications of the agreement have been explained to the parties to the agreement. To apply for a dissolution of marriage order, parties need to have been separated for at least two years.
There is often a negative connotation attached to contracting out agreements, however this need not be the case as there are many worthy reasons to consider a contracting our agreement. For some individuals, who have obtained significant assets or monetary funds prior to the commencement of a new relationship, a contracting out agreement provides protection from equal sharing in the event of a relationship breakdown in the future. Other couples may find themselves in a newly merged family, and wish to use a contracting out agreement to fulfill obligations to their own children in the event of death.
Contracting-out agreements do not need to exclude any sharing of property and are instead a tool to make things fair. Entering into a contracting-out agreement is a way of recognising a new relationship with the intent of providing clear expectations as to how assets should be divided in the event of separation and/or death in the future. Some people may have previously used trusts for the same purposes as a contracting-out agreement, however recent cases have shown that the security of a trust only for a contracting-out agreement is limited.