Edmonds Judd

Relationships

Over the fence

Family home v homestead: implications for relationship property

When a relationship breaks down, it is always difficult dividing up your joint assets.  It is important when deciding the division of relationship property under the Property (Relationships) Act 1976 (PRA) following a separation, or when forming a contracting out agreement, to accurately classify the home in which you and your partner/spouse live. The overall structure of the property will define whether your home is classified as the ‘family home’ or a ‘homestead.’

Family home: The PRA defines the family home as a property, including all land, buildings and improvements, which a couple generally, or primarily, reside in as their family residence. The property within the whole title must be used for the benefit of the relationship to be classified as the family home. In this case, all land under that title must be shared equally in a separation situation unless you as a couple have a contracting out agreement specifying the division of the property.

Homestead: Where only part of the property within the whole title is used for the benefit of the relationship, the portion attributable to the relationship may be considered the ‘homestead’ instead of the ‘family home.’ In this case, the remainder of the property may not be subject to the PRA principles of equal sharing, particularly if it is owned by a third party such as parents of one of the parties.

A family home will be considered a homestead if a portion of the property within the title is used by a couple as their general, or primary, family residence but the remainder of the title is used for the overall economic gain of another entity. This is more common in the rural context where couples reside on the farm but only a portion of the overall title contains the family home and the remainder is used for the economic gain of their rural business.

In this case, only the portion of the title considered to be the homestead would be considered in the division of relationship property, with the remaining property possibly not subject to the equal sharing principles of the PRA.

 

Road user charges and when to pay them?

The government imposes taxes on fuel through a road user charge (RUC) to collect funds for the maintenance and development of our roads. For most people, this tax is included in the petrol price.

Some vehicle owners, however, must pay the RUC and their fuel separately. If you own a vehicle weighing more than 3.5 tonnes, or a vehicle weighing less than 3.5 tonnes that runs on untaxed diesel, you must pay the RUC.

Your RUC licence is paid in advance to allow you to travel the distance purchased – usually in blocks of 1,000 kilometres.

You must always display the appropriate RUC licence on the inside of the passenger’s side of the front windscreen of your vehicle. Once your vehicle has travelled the distance covered by the RUC licence, you must renew your licence.

Owners must keep records of their vehicle use and have a hub odometer installed to accurately measure the distance it travels. Most vehicles that are subject to RUCs are sold with a hub odometer pre-installed.

Electric cars (EVs) do not currently incur RUCs. The new government, however, has indicated that EVs will pay the RUC from 1 April 2024 onwards.

 

Casual employees v seasonal workers

Seasonal workers are employed in certain sectors (particularly agricultural and horticultural areas) with the exclusive purpose of doing seasonal work, usually to assist with an increase in seasonal production requirements. Although seasonal work is temporary by nature, employers must be aware of the minimum entitlements for seasonal workers. There is a distinction between ‘casual’ workers and ‘seasonal workers’ in general. The Employment Relations Act 2000 requires specific clauses in employment agreements for these workers.

Casual employment: a casual worker is employed to work on shifts that are offered and accepted. There is no requirement for them to accept work you offer. In between periods of work, this worker is not considered to be employed by you.

Seasonal work: generally speaking, a seasonal worker is employed to work the entire season. These people are permanent employees on a fixed-term basis who are likely to be employed under a fixed-term agreement[1]. It is important that your seasonal worker’s employment agreement is drafted according to the specifics of the job.

If you need help with employing this summer’s casual and seasonal workers, please don’t hesitate to contact us. It’s vital to get these employment agreements correct – both for you and your employees.

[1] Section 66, Employment Relations Act 2000.

 

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Goodwill and good process will help prevent turmoil

The time following a separation can be highly emotional – for you and your spouse or partner, and for your children.

 

In this fraught environment, disputes can easily arise about the day-to-day care arrangements for your children or other vital issues such as where they will live, schooling, medical care, religious/cultural choices and so on. These are formally called guardianship matters.

 

In cases where the children are safe in their respective parent’s care, there are numerous ways in which care arrangements can be resolved and guardianship decisions made, without the need to involve the Family Court. A co-parenting relationship extends well beyond the uncertain period following a separation.

 

The best case scenario? Parents agree to ongoing care arrangements and guardianship matters between themselves and cooperatively focus on what is in the best interests of their children.

 

These best case scenarios, however, are not always possible, especially when disputes arise at a sensitive or acrimonious time for separating parents.

 

Can’t reach agreement?

What happens if parents cannot agree? Either parent can initiate the Family Dispute Resolution (FDR) process:

  • This is a mediation service, without lawyers, that deals specifically with care and guardianship disputes
  • A mediator is assigned to work with both parents, individually and/or collectively, to achieve an agreement, and
  • If agreement is reached, this can be documented in a mediated agreement.

 

If parents cannot reach agreement from the FDR process, then either parent can pursue the matter through the Family Court. Importantly, FDR is a prerequisite to attend the Family Court, unless there are urgent concerns for a child.

 

Some parents rely on third party assistance:

  • In many instances, parents can reach agreement after receiving (and following) advice and guidance
  • Using a third party can give conflicting parents an objective perspective, particularly at such an emotional time, and
  • Such support can be obtained through lawyers, counsellors and/or personal support networks such as family and/or friends.

 

Formalising the arrangements

Once you’ve reached agreement, some parents like (or it may be necessary) to have their children’s care arrangements formalised. This can be done with a parenting agreement; this document outlines the specific care arrangements and/or relevant guardianship provisions for children that both parents sign and (should) adhere to.

 

Alternatively, parents can consent to the terms of their agreement with a parenting order; this is a court-sealed document that collates the agreed terms and can be enforced if there are unconsented breaches.

 

Whatever the care provisions, it is in a child’s best interests for arrangements to be tailored to their age, stage and needs. Such arrangements should evolve with each child’s needs and stages and be regularly reviewed. Lawyers and counsellors who specialise in family and child disputes are often well equipped to provide advice on age appropriate arrangements and options.

 

Last resort is the Family Court

A Family Court hearing can be an expensive process – not only financially, but it can also take a significant toll emotionally and on the time of both parents, their children and their support networks. It also involves placing the decision regarding your children in the hands of a third party, the judge.

 

Obviously, having the parents cooperate and reach agreement is always going to be the best outcome for a family. However, there will be some situations where using the Family Court is necessary and preferred, such as when parents cannot reach agreement, where there are safety concerns for a child in either (or both) parents’ care or if urgent intervention is required (for example, preventing a child from being taken out of New Zealand).

 

If you are separating and need guidance about arrangements for your children, it’s important to get advice from a specialist family lawyer. Please don’t hesitate to contact us if this happens to you.

 

 

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Polyamorous relationships

Supreme Court confirms that the Property (Relationships) Act can apply

In a split decision, the Supreme Court recently confirmed by 3:2 that polyamorous relationships (that is, relationships between three or more people) can be subdivided into two or more qualifying relationships, to which the provisions of the Property (Relationships) Act 1976 (which applies to relationships between two people) can apply.

 

Background

Brett and Lilach Paul married in 1993. In about 1999, Brett and Lilach met Fiona. The three formed a triangular relationship in 2002.

During their 15-year relationship, all three lived on a farm at Kumeu that was registered in Fiona’s name. Lilach separated from Fiona and Brett in 2017. Fiona and Brett separated a few months later in 2018.

 

Family Court

In 2019, Lilach brought an application in the Family Court, in which she sought orders determining the parties’ respective shares in relationship property, including the Kumeu farm.

Fiona objected to the court’s jurisdiction, on the basis that the parties were not in a qualifying relationship for the purposes of the Property (Relationships) Act 1976 (PRA).

The Family Court sought guidance from the High Court about its jurisdiction to hear the case.

 

High Court

In the High Court, Justice Hinton held that the Family Court did not have the jurisdiction to determine the property rights of three people in a polyamorous relationship, because the requirement, under section 2D of the PRA that the parties be living together as a couple, excluded a scenario where all three people are participating in a multi-partner relationship.  Lilach appealed and the case went to the Court of Appeal.

 

Court of Appeal

The Court of Appeal disagreed with the High Court’s framing of the question put to it and found that jurisdiction could exist in the case of a polyamorous relationship.

The court agreed that the PRA was concerned with relationships between two people, meaning that polyamorous or multi-partner relationships are not qualifying relationships under the PRA. The court noted, however, that sections 52A and 52B of the PRA specifically provide for claims where a person is in multiple contemporaneous qualifying relationships. It found that the PRA does not require exclusive coupledom.

Within that context, the court held that the relationship between the parties could be viewed as three separate, but contemporaneous, qualifying relationships – a marriage between Brett and Lilach, a de facto relationship between Brett and Fiona and a de facto relationship between Lilach and Fiona.

Fiona appealed to the Supreme Court.

 

Supreme Court decision in June

In a decision released in June 2023,[1] the Supreme Court (by a 3:2 majority) dismissed the appeal and confirmed that the PRA could apply to polyamorous relationships.

Specifically, the court held that:

  1. A triangular (three-party) relationship cannot itself be a qualifying relationship, but
  2. A triangular relationship can be subdivided into two or more qualifying relationships.

In reaching this conclusion, the three Supreme Court judges who were in the majority noted that it was not contentious that the PRA applied to what it referred to as ‘vee’ relationships. A vee relationship is one where party A is married to party B, and A is also in a consecutive or concurrent de facto relationship with C, but where parties B and C may not know about each other, and may or may not live in the same residence.

The question was then whether the ‘triangularity’ of the relationship (ie: the existence of a relationship between parties B and C) makes any difference to the analysis. The majority held that it did not.

As noted, the Supreme Court decision was spilt 3:2, with the minority indicating that they would have allowed the appeal.

 

Practical implications

Following this decision, there may be increased interest by parties in polyamorous relationships in having contracting out agreements put in place. There are also likely to be claims under the PRA following the breakdown of a relationship, or on the death of a party to the relationship.

As all the decisions to this point have dealt only with the question of jurisdiction, no decisions have been made yet about the division of property between Lilach, Fiona and Brett. That issue will be sent back to the Family Court.

[1] Mead v Paul [2023] NZSC 70.

 

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Significant issues raised

In June 2023, the Supreme Court heard the ‘Alphabet case.’ To understand the significance of what is at stake in this case, it is worth considering the facts that gave rise to the litigation and the High Court’s decision.

 

Abuse of A, B and C by Mr Z

Mr Z and Ms J married in 1958 and separated in 1981. They had four children: G (1960-2015), A (b 1961), B (b 1963) and C (b 1971).

Mr Z severely abused Ms J and the children physically, psychologically and sexually. A was repeatedly raped between the ages of seven and 13, but she did not disclose the abuse to anyone until 1983. She did not tell her mother until 1991. A was unable to face taking action against Mr Z.

Mr Z died in 2016 leaving an estate valued at $46,839. He had, however, settled a trust two years previously for the express purpose of preventing his family from “chasing” his assets, to which he had gifted his home and investments worth $700,000. The children were not beneficiaries of Mr Z’s estate or the trust; rather, the trust’s beneficiaries were the children of Mr Z’s former partner.

 

Children’s claims

That should have been the end of the matter because the Family Protection Act 1955 (FPA), that allows children to challenge their parents’ wills, only applies to assets a deceased owned in their personal names; it doesn’t apply to trust assets.

However, the children argued that their father owed them a fiduciary duty and, that because of the abuse, he continued to have obligations to them even after they became adults. They said that Mr Z had breached that duty when he gifted his home and shares to the trust in order to prevent his children from claiming against those assets under the FPA.

 

In the High Court

In the High Court,[1] Justice Gwyn agreed with the children and said they could bring claims under the FPA against the assets that had been transferred to the trust.

The trustees of Mr Z’s estate and trust appealed to the Court of Appeal.

 

Court of Appeal divided over case

The Court of Appeal[2] accepted that Mr Z owed a fiduciary duty to his children and that he breached that duty when he abused them. The issue was whether Mr Z continued to owe those fiduciary duties to his adult children at the time he gifted his assets to the trust.

The majority of the Court of Appeal judges disagreed; they said that the appropriate remedy for the breach of fiduciary duty was equitable compensation (and the children had run out of time to make that claim).

However, one judge said that in some circumstances the inherently fiduciary relationship between a parent and a child may continue after a child becomes an adult (for example, in the case of a severely disabled child).

The judge (who was in the minority, so their views don’t affect the final outcome) decided that A’s position, owing to the abuse she suffered, was analogous to that of a disabled child. Mr Z therefore had a continuing duty to take steps to remedy, as best he could, the enormous harm he inflicted on A, not only when she was living in his care, but also during her adult life. This meant he was required to protect her interests when considering gifting his principal assets to the trust, and failed to do so.

 

Decision awaited

The Supreme Court will tell us whether Mr Z owed a continuing fiduciary duty to A into her adult life because of the abuse he perpetrated on her. Many commentators believe that it is stretching the concept of a child/parent fiduciary duty too far.

If legal principles cannot evolve, however, a situation may emerge where extraordinarily meritorious claimants are left with no effective relief, simply because too much time has passed, and/or because their parent transferred their assets into a trust to prevent claims after they have died.

That raises two questions:

  1. Should time count against people such as A, who have been so seriously abused by a parent?
  2. Should parents be allowed to transfer their assets into a trust in order to prevent their children making claims after their death?

[1] [2021] NZHC 2997.

[2] [2022] NZCA 430.

 

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Extended from 90 days to 12 months

The Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Act came into force on 13 June 2023. It has extended the timeframe in which a personal grievance (PG) can be raised when sexual harassment has occurred at work.

The timeframe now allows a PG to be raised within 12 months of the harassment occurring or coming to an employee’s attention, rather than the former period of 90 days. The purpose of this amendment is to allow sexual harassment victims more time to come to terms with what has happened before deciding whether or not to raise a PG.

Employment law fundamentals

Employment law in New Zealand is underpinned by the Employment Relations Act 2000; it promotes productive employment relationships and encourages employers and employees to act in good faith in all aspects of the employment environment. This is achieved by specific processes to help parties resolve employment disputes in a quick and flexible way, such as allowing an employee to raise a PG. A PG is a complaint that allows an employer and employee to address, amongst other things, a sexual harassment claim.

What is a personal grievance?

You may raise a PG against your current or former employer if you believe you have been treated unfairly or unreasonably. This includes situations where you think you have been:

  • Unjustifiably dismissed
  • Unjustifiably disadvantaged
  • Discriminated against in your employment
  • Sexually harassed in your employment
  • Treated adversely in your employment on the grounds of family violence, or
  • Racially harassed.

When deciding if an act or dismissal was justified, your employer, the mediator or the Employment Relations Authority must consider what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred.

You can choose to raise a PG with your employer directly or via the Employment Relations Authority. To raise a PG, you have 90 days, or  12 months for instances of sexual harassment, from the date the action or dismissal occurred or from when you became aware of it. You can, however, raise a PG after the 90-day period has expired in other circumstances if your employer agrees.

Defining sexual harassment

Sexual harassment is unwelcome or offensive sexual behaviour that is either repeated or serious enough to have a harmful effect. It can be direct or indirect. Sexual harassment does not have to be physical; it can also be through written, verbal or visual materials/actions. You may only raise a PG for sexual harassment if it has occurred during the term of your employment. Sexual harassment is defined in sections 108 and 117 of the Employment Relations Act 2000.

Know your rights

It is important for both employees and employers to know their rights and obligations surrounding personal grievances. Employers should ensure their employment agreements are updated to reflect the above amendments.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Advance directives

Right to choose your healthcare

Healthcare choices can influence the quality of our lives. An advance directive can provide direction on the care you consent to, and do not consent to, when you are incapable of expressing your wishes.

An advance directive can be used when you do not wish to consent to a particular form of healthcare or where you wish to receive a certain form of treatment in situations where you are unable to provide instruction such as a blood transfusion or resuscitation. Your healthcare provider will consider your advance directive when you are unconscious, incapacitated or otherwise unable to provide informed consent.

Making an advance directive

There are a variety of ways to make a directive. There are online templates (see the footnote for one example[1]), you may wish to do your own using these as a guide (remember to sign and date!) or you may want to discuss this with us.

Is it valid?

Your advance directive must be expressed in clear terms. Although your advance directive may be made orally or in writing, a written directive will provide greater certainty and clarity.

Advance directives must be made at a time when you have mental capacity and are not unduly influenced by another person. You may have to show that you have received sufficient information from your healthcare provider to understand the implications of your decision, particularly in high-risk situations such as a critical accident. The information you will need to provide to meet these requirements will depend on the circumstances of your care.

You should send your advance directive to your doctor and other health professionals who look after you. Your family should also have a copy.

Not being able to use your advance directive

Your healthcare provider may respect your advance directive if they are aware of it. There are instances, however, where healthcare providers may not use your advance directive even if they are aware of it. An example is when a health professional is obliged to provide compulsory treatment for mental disorders under the Mental Health (Compulsory Assessment and Treatment) Act 1992.

There are also certain forms of treatment that you cannot consent to. For example, your healthcare provider cannot be compelled to assist in your death or to provide treatment that is not clinically available.

If your advance directive is uncertain, based on incorrect information or if it is unclear whether it applies to a given situation, your healthcare provider may decide to provide treatment if they believe it is in your best interests. In this instance, your healthcare provider must attempt to obtain your consent. This also applies if there is insufficient time to determine whether you have an advance directive, such as if there is an emergency or an accident. You will be given the appropriate medical care that is required at the time.

Enduring power of attorney

You may have appointed an attorney to make healthcare decisions on your behalf through an enduring power of attorney for personal care and welfare; your attorney must act in your best interests. As your advance directive is a representation of your interests, your attorney is likely to uphold the directive.

However, your attorney has a discretion on whether to uphold your directive. Ultimately, whether your advance directive will be respected will depend on its certainty and on the circumstances of your care. If your attorney decides that treatment or a refusal for treatment will better protect your welfare and best interests, they may instruct your healthcare provider to act contrary to your advance directive. It is, therefore, critical to discuss this with your attorney to ensure they understand your healthcare preferences.

How can we help?

With more healthcare options available, it is important that you have the best opportunity to decide what healthcare you would like to receive. Although there is no requirement for a lawyer to be involved in the process, we can help to ensure that your advance directive is clear, certain and applicable in most circumstances.

If you have not received treatment or have received treatment that you did not consent to, you can lodge a complaint with the Health and Disability Commissioner. If you need further guidance, please do not hesitate to your lawyer.

[1] www.myacp.org.nz/your-plan

 

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Make it clear in the trust deed

In the recent case of Re Merona Trustees Ltd[1], the High Court was asked to determine who the beneficiaries of a trust were as it was not clear who was intended by the phrase the ‘children of the settlors’ that was in the trust deed.

Background

The trust settlors, Merv and Rona, had two daughters together – Lilly and Miffy. Rona also had two sons from a previous marriage when she was very young – Rob and Ray. When Rona’s first marriage broke down, and in the absence of social welfare benefits, she could not afford to keep her sons, and they both went to live with different extended family members. Rob had occasional contact with Rona and, after Rona’s marriage to Merv, Rob was raised by them both. Ray, however, was raised by extended family and had no contact with Rona. It was only as an adult that Ray came to know Rona and the wider family.

Interpreting the trust deed

Rona died in 2013. Merv died in 2020. After Merv’s death, a question arose as to who were the beneficiaries of the trust they had settled.

The question for the High Court was interpreting the trust deed that referred to ‘the children of the Settlors’. Did it mean:

  • The two natural children of Merv and Rona together, being Lilly and Miffy
  • The two natural children of Merv and Rona, as well as Rona’s son Rob, who was raised as a member of Merv and Rona’s family, or
  • The two natural children of Merv and Rona, as well as both of Rona’s sons, Rob and Ray?

High Court hearing

The court heard two main competing arguments.

The trustees primarily argued that ‘the children of the settlors’ meant Rob, Lilly, and Miffy; the ‘children’ did not include Ray. They said that the context in which the trust was established was highly relevant to the interpretation of the trust deed. In particular, a predecessor trust had been established in 1986 before Ray connected with Rona as an adult. The trust in question was settled in 2002, when Rob, Lilly and Miffy were in their forties and fifties.

Even in 2002, after coming to know Ray, Merv and Rona presented to their professional advisors as a couple with three children – Rob, Lilly, and Miffy. Their accountants recorded Merv, Rona, Rob, Lilly and Miffy as the beneficiaries of the trust. The family’s lawyers also understood Rob, Lilly and Miffy to be Merv and Rona’s three adult children. Merv and Rona also signed memoranda of guidance in relation to the trust, that were effectively instructions to the trustees as to their wishes. These memoranda recorded their wish that ‘our children’ benefit from the trust; Rob, Lilly, and Miffy were named, but Ray was not.

Finally, Rona’s will left a bequest each to Rob, Lilly, and Miffy as her children, and an equal but separate bequest to Ray who was described as her ‘birth son.’ She also left him a letter which asked that he be content with this bequest. The court found that by implication, she did not see him as eligible to benefit from the family wealth which was otherwise held in the trust.

On the other side, Ray’s lawyers argued that Ray was also a beneficiary of the trust. They said that once Ray had been reunited with Rona, they developed a close relationship with each other and the wider family. Although Ray was not close with Merv, Ray was included in family gatherings including at Christmas and birthdays. Ray was treated equally with Rob, Lilly, and Miffy in Rona’s will, and he was a part of the family.

The High Court considered that Merv and Rona had brought Rob up as a child of their own, and that it was ‘inconceivable’ that they would have intended to exclude him as a beneficiary of the trust. The documents signed at the time, and subsequently, showed that Merv and Rona thought that Rob was a beneficiary of the trust. In the context of their family, ‘the children of the settlors’ plainly included him. The only question was then whether Ray was also included.

Decision

The court found that the language of the trust deed could be interpreted to include Lilly and Miffy as natural children of the settlors, as well as Rob, who was raised within the family unit as though he was a natural child of both Merv and Rona.

The wording of the trust deed, however, could not be interpreted to include Ray. While Ray enjoyed a good relationship with the family when they reconnected, he was not raised as a part of Merv and Rona’s family unit.

Care must be taken

This decision emphasises the importance of clarifying who is intended to be a beneficiary of a trust at the outset. This is particularly necessary in the context of blended families where there may be reasons to differentiate between classes or groups of children.

In this case, the lawyers and accountants were not necessarily aware that Rob was not a child of Merv and Rona. It is possible that if they had known at the outset, the trust deed would have been drafted in a way that made it clear who the beneficiaries were.

If you are concerned about the wording of your trust deed and how it may affect your children, please be in touch to review your trust deed.

[1] Re Merona Trustees Ltd [2022] NZHC 1971.

 

 

DISCLAIMER: All the information published in Trust eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Trust eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Bank of children

Children helping their parents

Most of us have heard of the expression ‘Bank of Mum and Dad’ where parents help fund their children to get onto the property ladder or with another investment.

 

What happens in the reverse situation, however, where children become the ‘bank’ and assist their parents financially?

 

Why would this happen?

In recent years, parents may have assisted their children in allowing their property to be used as security for borrowings by their children, they could have helped fund the deposit for a child’s first property or provided financial support in a number of other situations.

 

Sometimes, the boot is on the other foot when parents retire or have their income reduced. That may be the time for children to repay the favour and assist their parents.

 

Family-wide discussion

If children are considering helping out their parents financially, we recommend that you have a family-wide discussion on what sort of assistance could be provided.

 

It is important that the entire family is aware of any proposed arrangements, especially if not all of the children are going to be involved. Those children who are assisting may become part-owners of their parents’ property as part of the agreement.

 

There are various family arrangements that could apply but some children may already own their own home. Other children may already be living with or intend moving in with their parents. All of these circumstances will need to be considered.

 

Contact your parents’ lender

Presuming the transaction will be funded by a loan, rather than cash from the children to the parents, the next step is for the parents to contact their lender (usually their bank) to discuss its requirements. The lender may require the current lending for the parents to be discharged and an updated finance application in the name of all of the joint owners with new loan documents. Often, the lender requires the added security and details of a child’s income for the application.

 

See your lawyer

To prevent any future difficulties and dissention in the family, it is important to arrange suitable documents such as a property sharing agreement. This records each party’s responsibility for who and how the family will use the property, loan repayments, maintenance of the property, rates, insurance and a sale process for the property should there be a breakdown in the parties’ relationship or if one of the parties wishes to sell.

 

A property sharing agreement will be the guiding document for the arrangement. As well as ensuring you have a will in place, the agreement can cover what will happen to the parent’s share of the property when they die. The last thing parents want is a falling out between their children.

 

Other things to consider

Other considerations for both parents and children include:

  • The children’s ability to use KiwiSaver funds in the future to purchase their own home
  • Current and future relationships of the children
  • Parents moving into a rest home and how subsidies could be affected
  • The alternative of a reverse mortgage, and
  • Review of wills and enduring powers of attorney.

 

Conclusion

With increases in interest rates and the rise in the cost of living, more retiring parents may face the difficulty of retaining their family home. Rather than the option of a sale, children may be able to assist with the retention of their parents’ home and keeping past memories alive.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Shared parenting

Relocating the children without consent

Deciding to move to a new location can be exciting and bring a sense of renewal, particularly after a long cold winter and enduring these Covid years.

 

However, if you are separated with children, what happens to ongoing parenting arrangements in these situations? Can you move with your children without agreement from the other parent?

 

If you do this, it is referred to as a ‘unilateral relocation’, and it can result in applications filed and court orders sought. Both parents are considered a guardian of the children, regardless of how much contact one of the parents may have. There are certain decisions about a child that are ‘guardianship decisions.’ You must discuss these with the other parent. Topics to talk about include where a child lives, where they go to school, any medical decisions and so on.

 

The process

Whatever the reasons for you considering a move, the best option is to discuss this openly and honestly with the other parent. Understandably, the idea of your children moving away can be difficult for the other parent.

 

It may be that you can reach an agreement between the two of you. If it becomes difficult, you can get help initially with mediation forums outside of the Family Court.

 

If you cannot agree, you can file an ‘application to resolve a dispute between guardians’ in your local Family Court and the court will decide for you. The court will look at specific factors, including:

  • What is in the best interests of your children
  • Your children’s relationship with you both
  • What contact arrangements would look like for the other parent, as the court recognises the importance of your children having a relationship with both of you
  • The ages of your children, and
  • Your children’s views on the move.

 

Don’t want them to move?

If your children have not yet moved, and you don’t want them to, you can file an application in the Family Court to stop the children from being moved within New Zealand. You can also ask the court for an ‘order preventing removal’ to stop the children from leaving New Zealand. These applications can be filed on a ‘without notice’ basis, where you ask the court to consider the application without first hearing from the other party.

In this application, you ask the court to make an order that states the children cannot be removed from a specified location (within New Zealand or from New Zealand). With this order in place, it limits your children being removed until further investigations could occur or agreement is reached.

 

What if they are moved anyway?

If the children are relocated without your consent, you can apply to the Family Court for the children to be returned to where they had been living. You would file again for a guardianship order that your children reside in a particular place, and then file for a parenting order. The court will generally favour the status quo location of your children, which is where they were

living for the most recent period before they moved. In determining these applications, the court will always consider what is in the welfare and best interests of the children. This is a paramount consideration.

 

Children’s best interests come first

It is important that your children are happy and settled, and that their interests come first. Ideally both parents will work together to ensure arrangements for their children’s welfare are agreed harmoniously. If, however, agreements can’t be reached, there are options for court intervention. It is wise to try and avoid that as it can be very expensive and take a long time. Most of all, it can affect your children’s relationship with both parents – and no one wants that.

 

If you are concerned about where your children are living, or that they could be moved without your consent, please be in touch with us straight away so we can avoid too much heartache for everyone.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


It can sometimes be confusing when we talk about an attorney (for an Enduring Power of Attorney – EPA) and an executor who is appointed in your will and who looks after your estate when you die. The difference, as outlined below, is literally a matter of life and death.

 

An EPA

An EPA is used when you may not be able to make decisions for yourself. For example, you may become very unwell, or unable to communicate important decisions (you could be away from email or phone access for some time), leading in either case to an inability to make important decisions. Your attorney is the person you trust to act in your best interests – with your property and your wellbeing.

 

There are two types of EPA – property, and personal care and welfare. Your attorney can be the same person/s or you can choose different people for these two roles.

 

An attorney’s role

Your property attorney can manage your finances, they can sell your house if necessary and even buy Christmas and birthday gifts for specific people. Your personal care and welfare attorney can make decisions about your medical care, help choose a rest home if you need to move, and consult with other family members about your health.

 

Most importantly, your attorney makes decisions in your best interests; they only have as much power as you give them in your EPA. Your personal care and welfare attorney cannot, for example, withhold life-saving medical treatment; it is absolutely up to you to decide what your attorney can, and cannot, do.

 

Who needs an EPA?

EPAs aren’t just for the elderly. They are also for the young man who has had serious injuries in a car accident  and struggles with his memory, and for the 50-year-old who is working offshore and wants her partner to sign documents on her behalf.

 

Without an EPA, nobody can make decisions on your behalf if you can’t make them for yourself. Your parents, spouse or children don’t automatically have this right. The only way around this is to spend thousands of dollars working through the Family Court to get an attorney appointed.

 

A will

A will is the document that states where you want your assets to go after you die. Your will appoints an executor, or several executors; they will carry out the wishes that are stated in your will.

 

Executor’s role

An executor works with us to administer your estate and carry out the terms of your will.

 

Your executor calls in your assets and pays any money you may owe. They ensure, for example, that your daughter gets your engagement ring, your life insurance pays off your mortgage and they invest the rest of your money until your children turn a specified age and can get their inheritance.

 

Get your affairs in order

Without a will, your assets will be distributed according to the intestacy rules that govern who gets what from what your estate. Without a will, your family may not get what they expect or what you want which could be very upsetting for them.

 

The only wrong time to get a will and an EPA is when it’s too late. Take back the power to decide where your assets go when you die, and save yourself and your family much heartache. Get in touch with us about preparing your will and EPA today.

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650