Marriage and property rights

26 Aug, 2016 by Barry 6 Comments

I’m surprised by the similarities and differences of what makes up marriage property rights in various countries. Most nations have moved to the position where property is owned in equal share by both partners in a marriage, and in the case of divorce or separation, many countries are working towards, or have moved to ‘equal-sharing rules’ in which the presumption is that both partners have contributed equally to the marriage and therefore property and child rearing responsibilities should be divided equally.

As more countries recognise same sex marriages, people in such relationships are also achieving the same rights to property as heterosexual couples. This is perhaps more true in “Western” countries than elsewhere.

Where I see a greater difference is in what is recognised as a marriage in different jurisdictions. For example, in England common law marriages aren’t recognised at all, and only a few states in the USA recognises common law marriages. Usually one half of the partnership will be seriously disadvantaged should they decide to split up.

Matrimonial property in NZ

If you were to search the law books of Aotearoa New Zealand for a definition of matrimonial property, you’d be searching for a very long time as it doesn’t exist. The main reason for this is that as far as property is concerned, it’s the relationship between a couple that determines property rights and not a marriage certificate.

What would be termed common law marriage in other jurisdictions is termed de facto relationship here. It is one of three types of relationships that are covered by the Properties (Relationship) Act 1976 and its amendments. The other two types are marriage and civil union.

The act has four principles, three of which are relevant here:

1. that men and women have equal status, and their equality should be maintained and enhanced
2. that all forms of contribution to the marriage partnership, civil union, or the de facto relationship partnership, are treated as equal
3. that a just division of relationship property has regard to the economic advantages or disadvantages to the spouses or partners arising from their marriage, civil union, or de facto relationship or from the ending of their marriage, civil union, or de facto relationship

If you live together as a couple and are not married or in a civil union, you’re legally considered to be in a de facto relationship.

For all practical purposes, a relationship begins when a couple start living together or have their marriage or civil union formalised (which ever happens first), and ends when they cease living together or one of them dies. The act also makes provision for the dissolution of a marriage or civil union, but as that can only occur after not living together as a couple for two years, it’s not really of any significance here.

All property acquired, used or shared after a relationship commences is considered relationship property, while property previously acquired becomes relationship property after the couple have been living together for three years.

So here in NZ all couples, whether in heterosexual or same sex relationships, in marriages, civil unions, or de facto relationships are treated equally in regards to property rights. Personally, I believe thus is how it should be. What is also of significance is that there is no necessity for a couple to have a sexual relationship, or even to live in the same residence for a de facto relationship to exist. If there is a dispute about a relationship existing, then the following criteria are taken into consideration, but the absence of one or more of them does not necessarily  mean they are not a couple:

1. The duration of the relationship
2. The nature and extent of common residence
3. Whether or not a sexual relationship exists
4. The degree of financial dependence or interdependence, and any arrangements for financial support, between the parties
5. The ownership, use, and acquisition of property
6. The degree of mutual commitment to a shared life
7. The care and support of children
8. The performance of household duties
9. The reputation and public aspects of the relationship.

As there are no advantages to being in a marriage or civil union as far as property rights go, it begs the question why do so many couples eventually marry? There are no tax advantages in having a relationship formalised in marriage or civil union as incomes can not be pooled or shared in NZ. Each person is taxed individually. Income from shared property such as interest from a joint bank account, or rent from a shared property is divided equally and then added to the income of each individual.

About one in three relationships in NZ end before the death of a partner, and after five years, de facto relationships seem to be as stable as marriages and civil unions. Around two out of five couples live in a de facto relationship, and it seems to me that it’s time to question whether marriages and civil unions need to be formalised by the state at all. As there’s no legal or financial benefits in having a document that says a couple are married, why should the state get involved?

I can understand the desire for a couple to want to publicly declare their commitment to each other, in fact I think it’s admirable. But does making it a legal contract make the commitment any stronger? It would seem no if the NZ experience is to be believed. Can anyone give me a strong reason why relationships should be registered and made legally binding in the form or marriage or civil union?