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Talking Trusts with Tammy McLeod, Davenports Harbour Lawyers

Tammy McLeod (BA LLB) is a partner at Davenports Harbour Lawyers. Tammy leads the Davenports Harbour Trust Team and enjoys providing clients with advice and assistance on a broad range of issues involving the establishment and structuring of asset plans, interpretation of trust deeds, duties of trustees and the management and administration of trust funds. A key part of Tammy’s practice is reviewing existing asset holding structures to ensure they achieve the needs and requirements they were established to meet. She is also experienced in Property (Relationships) Act issues and believes that the provisions of the Act are an important consideration in personal asset planning. Tammy is a past president of the Auckland Women’s Lawyers’ Association and is a current co-convenor of the NZICA Trust Special Interest Group.

Law

Andrea & Tom

Andrea and Tom had been in a relationship for some time. They hadn’t yet bought a house, but were flatting together with another couple. They had always kept their finances separate and contributed equally to household expenses. Andrea and Tom were earning roughly the same amounts. They both had great jobs in a bank in the city (that is where they met) and were both earning huge bonuses.
Andrea was a fantastic saver - every bonus she got she was adding to an investment portfolio that her grandparents had set up for on her 21st birthday. She was also contributing a lot more than what was required to her kiwisaver which was growing quite nicely.
Tom on the other hand was a terrible saver. Every mod con there was going, he had to have. He loved a good night out with the boys and his expensive tastes meant he spent copious amounts on fancy suits and extravagant shoes. He had joined kiwisaver, but was only contributing the minimum required. It was his only form of saving.
After four years together, Andrea got sick of Tom’s partying ways. She was getting annoyed with the fact that she was saving so hard and yet Tom didn’t understand the concept of saving. She was keen to start saving for a house, but realised that actually she and Tom were completely incompatible and the arguments that they were having now about money would only get worse as their relationship continued. Andrea decided to split up with Tom and move back to her parents’ house.
About three weeks after moving out, Andrea received an email while she was at work from Tom’s lawyer. The letter said that Tom was wanting to divide “relationship property” and could Andrea please provide a full breakdown of all of her savings, kiwisaver and any other assets she had acquired during the relationship. Andrea couldn’t believe it. She had Tom had always had an unspoken agreement that what they earned and what they spent it on was their own business. She decided to take her own legal advice.
When Andrea went to see her lawyer, she was horrified to learn that any income you earn during your relationship and anything that you do with it, is relationship property and if you separate, will be split 50/50. Even though Tom had spent all his earnings, and Andrea had saved all of hers, it was to her detriment and Tom would be entitled to half of everything she had saved. Andrea learnt the hard way that a relationship property agreement is key when you are in a de facto relationship.

By Tammy McLeod
tammy@dhlawyers.co.nz

Channel Magazine: Issue 78 July 2017


Columnist articles by Tammy McLeod