Is My Business Safe from Relationship Property Claims?
The Property (Relationships) Act 1976 (the PRA) provides that when spouses separate after a relationship of three or more years ‘relationship property’, such as the family home and property acquired during the relationship, is equally divided between the spouses with limited exceptions. ‘Separate property’, such as property owned prior to the relationship, gifts and inheritances, is not shared but may be the subject of compensatory awards.
Where business assets are held in trusts (a popular arrangement in New Zealand for income distribution and increased protection from creditor claims) those assets will be neither relationship property nor separate property in the first instance. So they may be immune from applications under the PRA. However, an increasing number of applicants are challenging trusts successfully.
The Clayton reasoning expresses an emerging view of courts that those who seek to enjoy the protection of trusts are required to submit to fiduciary constraints. This means less control over trust assets. Only weeks ago Clayton was cited by a UK court which showed no mercy to a Russian oligarch seeking to use New Zealand trusts to protect $95 million from claims made by the Russian State and a collapsed Russian bank (Mezhdunarodniy Promyshlenniy Bank v Pugachev). The international business community is on notice.
Our firm has a strong and experienced relationship property practice. We welcome the opportunity to advise you and your business partners about relationship property claims and trusts which effectively balance the competing objectives of protection and control over trust assets.
Sarah Moore, Senior Solicitor
Sarah has extensive experience advising clients on a wide range of family law matters. Her expertise includes managing multi-million dollar tax-complicated property and trust disputes in New Zealand and Australia.
- Why Bahamas is the Clear Choice for Financial and Corporate Services Providers?
- An IP Toy Story
- Brexit: Trade Mark Update
- Deadline Looms for Pending Cases in Front of Administrative Law Judges, per SEC Orders
- MinterEllisonRuddWatts Advises TOMRA in Acquisition of BBC Technologies
- Kraft Heinz acquires food and coffee business of Cerebos Pacific
- MinterEllisonRuddWatts Short Listed in Five Categories for Firm’s Diversity by Euromoney Legal Media Group Asia Women in Business Law Awards
WSG Member: Please login to add your comment.