Jan... & Tony

Jan had recently separated from her husband of 20 years. It was a relatively harmonious split – they had been moving in different directions for many years, and they simply went their own separate ways. They had done relatively well during their marriage and Jan was left with enough to invest some funds with a fund manager as well as buy herself a brand new townhouse in a development in Takapuna.

Jan’s friends told her that she needed to set up a trust for her assets. They said that it would protect the assets if she got into another relationship. Jan wasn’t so sure. She took some advice from her lawyer who said that it was completely up to her but if she didn’t set up a trust, then she needed to make sure she entered into an agreement with any new partner, contracting out of the Property (Relationships) Act. 

Six months after seeing her lawyer, Jan met Tony. Tony was also separated from his wife, but he had also had a business failure and was in the process of re-building his asset base. He was renting a property as he didn’t yet have enough to buy his own home. Jan and Tony’s relationship progressed and while he hadn’t moved permanently into Jan’s home they did spend a lot of time at each other’s houses. 

Jan remembered the advice from her lawyer, that she needed to enter into a contracting out agreement once she was in a de facto relationship, but Jan didn’t really think that she and Tony were in a de facto relationship as they hadn’t formally moved in together. 

This arrangement carried on for three and a half years, until one day one of Jan’s friends called her and said that she had seen Tony in a bar with another woman.  Jan wasn’t so much upset, as annoyed that Tony was “two timing” her and called the relationship off.  A few weeks later Jan got a letter from Tony’s lawyer saying that because he and Jan had been in a de facto relationship for three and a half years, he was making a claim against her home as it was relationship property. 

It is important to be aware that a de facto relationship does  not mean that you have to be permanently living together.  If you are unsure whether you are in a de facto relationship (as defined by the law) you need to take legal advice. 

Issue 85 March 2018