Edmonds Judd

Relationships

Relationship property claims

Sign a contracting out agreement

When entering a second or subsequent relationship, it is common to want to keep assets safe from relationship property claims. An effective way to do this can be by transferring assets to a trust. Care needs to be taken, however, to ensure you do this within the law.

A recent case[1] reminds us that transferring assets to trust will generally be ineffective where:

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Charities in New Zealand

Charities play an important role in our society to help the disadvantaged, support specific causes or to advance knowledge. In New Zealand we have more than 27,000 registered
charities, with 230,000+ volunteers and 180,000 paid staff [1]. Many of these charities are
structured as trusts which can be incorporated and run as a trust board by the trustees.
Others are structured as incorporated societies or companies, or as unincorporated bodies. These types of charities are run by a board with specific obligations and responsibilities.

The Charities Act 2005 (which is currently under review) regulates the Charities Register and sets out the statutory rules relating to registered charities. Those rules include a re-quirement for registered charities to report, on an annual basis, to Charities Services (a di-vision of the Department of Internal Affairs).

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Postscript

Smoking in motor vehicles with children now banned

Smoking in motor vehicles when children under the age of 18 years old are present is now prohibited. The passing of the Smoke-free Environments (Prohibiting Smoking in Motor
Vehicles Carrying Children) Amendment Act 2020 has made this an offence.

Police will now have the discretion to issue on-the-spot fines of $50 for those who are caught smoking in cars with children, or they may issue warnings or refer people to stop-smoking agencies.

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Some temporary changes

Due to the Covid lockdown and the ensuing impact on the country’s economy, the government has made temporary changes to the Residential Tenancies Act 1986. These changes restrict a landlord’s ability to increase the rent or to end residential tenancies. If you are a landlord, you should read on to ensure you are not inadvertently breaching this temporary law change.

Over the period 26 March 2020 until 25 September 2020, landlords cannot increase the rent for a residential tenancy. This includes any rent increases about which you have already notified to your tenant, but had not taken effect before 26 March 2020. If you try to enforce a rent increase before 25 September 2020 you will be committing an unlawful act.

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The wise and just will-maker

I need to make a will but I do not want to leave my estate to my son as I never see him. I also do not want to leave my estate to my stepchildren. What can be done?

In some parts of the world, a will-maker can leave their assets to whomever they want, whether that be their children, a distant relative or to the local cats’ home. In New Zealand, however, this is currently not the case. Continue reading


A cost-effective alternative to court

After separating, you could find yourself at loggerheads with your former partner or spouse on exactly how all property should be divided between you. Negotiations may be bouncing between your lawyers, with no common ground achieved. Without agreement, you could file court proceedings but learn costs would increase dramatically. As well, it could be years before a judge can give a decision on how your property will be divided.

Mediation, on the other hand, could be arranged within weeks. It offers a practical alternative to reach a conclusion on how property should be divided between you and your former partner.

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Contracts are commonplace in business and life. A well-drafted contract can provide certainty and clarity for businesses and others by creating legal obligations for each party to do what they say they will. But what if a party to a contract doesn’t do what they promised they would? Are you allowed to penalise that party for not fulfilling their obligations under the contract? We will explore the enforce-ability of so-called ‘penalty clauses’ in light of a recent decision in the Court of Appeal.

What is a penalty clause?

It is common for businesses to try to reduce their risk of suffering a loss under a contract. One way businesses try to minimise their risk is by including a clause in the contract that requires money to be paid to them to compensate for loss if the other party doesn’t do what they promise.

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Claims on an estate

How much can a disinherited child expect?

The Family Protection Act 1955 allows children to bring claims against the estate of a deceased parent on the basis that their parent did not adequately provide for their ‘proper maintenance and support’. Exactly what constitutes ‘proper maintenance and support’ is the subject of considerable litigation, as well as extensive commentary in the media.

Since a trio of Court of Appeal decisions in the early 2000s, a general understanding has emerged that awards under the family protection legislation can be quantified by referring to a percentage of the relevant estate. It has long been said that a financially-stable adult child might expect to receive between 10%–20% of the estate of their deceased parent, depending on a number of factors including the size of the estate and the position of others under the will or those people who are entitled to make a claim. In many cases, the 10%–20% threshold has become an informal benchmark when assessing the position of a financially-stable adult child making a claim against a modest, but not insignificant, estate. Continue reading


Rewarding value and increasing engagement

Bringing a key employee or a family member into your business by offering them a shareholding can be a powerful motivator and a significant indicator of how much you value their contributions to your success. However, the process should be done carefully with a robust shareholders’ agreement and company constitution, as there are many facets of the company-shareholder relationship that must be agreed upon to ensure a harmonious future between yourself and the new shareholders.

The circle of trust

First and foremost, your shareholders should be people whose values are aligned with those of your business. Even if they are minority shareholders, there are circumstances in which you will have to rely on their good judgement. The easiest way to prevent disagreements down the road is to carefully consider their business sense, character and propensity for confrontation before embarking on shareholder discussions.

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