When a Partner Claims Relationship Property

The executor believed the will was straightforward.

The deceased’s two adult children were to receive the estate equally. The main asset was the home where the deceased had lived with a partner for more than a decade.

Then the surviving partner produced a letter from a lawyer.

They were not simply asking for a larger inheritance. They were considering an election under the Property (Relationships) Act 1976, claiming that part of the property described in the will was already theirs as relationship property.

The children reacted angrily.

They pointed out that the house was registered solely in their parent’s name. The will clearly left it to them. They believed the executor’s only duty was to follow those instructions.

That is not always how New Zealand law works.

A will can distribute only the property that remains in the deceased’s estate after valid ownership rights and liabilities have been addressed. A deceased person cannot give away the surviving partner’s share of relationship property merely by putting the asset in a will. The surviving partner has a statutory choice that can significantly change both the value and composition of the estate. citeturn450583view0turn450583view1

For an executor, this means relationship-property questions must be identified early, handled neutrally and resolved before affected estate assets are distributed.

## Relationship Property Comes Before Inheritance

A relationship-property claim is not simply another request for money from the estate.

It concerns ownership.

The surviving partner may argue that certain property treated as belonging to the deceased was relationship property accumulated through the marriage, civil union or de facto relationship. If the partner chooses to divide property under the Act, the estate may retain only the deceased’s share after that division.

The remaining estate is then distributed under the will or, if there is no will, under the intestacy rules.

New Zealand guidance describes the surviving partner as having first claim to their share of relationship property. This reflects the principle that one partner cannot dispose of the other partner’s share through a will. citeturn450583view0

The executor must therefore avoid treating the gross assets in the deceased’s name as automatically available to beneficiaries.

## The Surviving Partner Has Two Main Options

When a spouse, civil union partner or qualifying de facto partner dies, the survivor generally has two choices.

### Option A: Divide relationship property

Under option A, the survivor asks for relationship property to be divided under the Property (Relationships) Act.

The broad starting point for a qualifying relationship is commonly an equal division of relationship property, although classification, short relationships, contracting-out agreements, extraordinary circumstances and other statutory rules may alter the result.

The deceased’s resulting share becomes part of the estate.

### Option B: Take under the will or intestacy rules

Under option B, the survivor accepts what the deceased left them under the will. If there is no valid will, they take what the intestacy rules provide.

If the survivor makes no valid choice within the applicable period, option B is generally the default. citeturn450583view0turn450583view1

The executor should not advise the surviving partner which option is financially better. The survivor must receive independent legal advice because the choice can be difficult to reverse and may have major consequences.

## Why Option A Can Radically Change an Estate

Consider a simplified example.

The deceased’s will leaves:

– The family home to two children
– $100,000 in savings to the surviving partner
– The remainder to the children

The home is worth $900,000 and has no mortgage. It is solely registered in the deceased’s name, but it was purchased and paid for during a long relationship.

If the surviving partner chooses option B, they may receive the $100,000 gift, subject to the will, estate liabilities and any other claims.

If the surviving partner chooses option A and the home is relationship property, they may seek their relationship-property share. A simplified equal division could transfer $450,000 of value to the survivor before the will is applied to the deceased’s remaining share.

This example is deliberately basic. Real calculations may involve:

– Mortgages
– Separate property
– Trusts
– Businesses
– Debts
– Gifts and inheritances
– Improvements
– Intermingling
– Contracting-out agreements
– Unequal contributions
– Compensation claims

The important point is that a specific gift under the will can shrink, change form or become impossible to complete after relationship property is divided.

## The Executor Should Identify the Relationship Immediately

The executor should establish whether the deceased had:

– A spouse
– A civil union partner
– A de facto partner
– A recently separated spouse or partner
– More than one person asserting partner status
– A former partner with unresolved property rights
– A contracting-out or settlement agreement

Do not rely only on the will.

A will prepared years earlier may describe someone as a spouse even though the relationship later ended. It may omit a partner who entered the deceased’s life after the will was signed.

Relevant evidence can include:

– Marriage or civil union records
– Shared addresses
– Joint accounts
– Property ownership
– Correspondence
– Insurance nominations
– Tax and benefit records
– Family evidence
– Relationship-property agreements
– Separation documents
– Court orders

Whether a de facto relationship existed can itself become a major dispute.

## De Facto Partners May Have Rights

A qualifying de facto partner can have relationship-property rights after death.

A de facto relationship of three years or more will commonly fall within the ordinary Property (Relationships) Act regime. Shorter relationships may also qualify in limited circumstances, including where there is a child of the relationship or substantial contributions and serious injustice would otherwise result. citeturn450583view1turn251899search19

The executor should not reject a claim merely because the couple:

– Were not married
– Kept separate bank accounts
– Owned the home in one name
– Spent time at different properties
– Did not describe themselves publicly as partners

The legal assessment looks at the relationship as a whole.

Likewise, sharing an address does not automatically prove that a qualifying de facto relationship existed. Evidence may be needed about commitment, finances, household arrangements, intimacy, public reputation and mutual care.

## Competing Partner Claims Require Extreme Care

Occasionally, more than one person may claim surviving-partner rights.

For example:

– The deceased remained legally married but lived with a de facto partner.
– A recent separation was not formalised.
– Two people dispute when one relationship ended and another began.
– The deceased maintained households in different locations.

The executor should not decide partner status based on personal preference or family loyalty.

Obtain written details from each claimant and preserve evidence concerning:

– Dates
– Living arrangements
– Financial interdependence
– Property use
– Separation
– Public presentation
– Care and support
– Legal agreements

Do not distribute significant assets until the competing claims are resolved through agreement or court determination.

## The Choice Must Be Made Formally

A surviving partner cannot make an effective option A election merely by telling the executor:

> I want half the house.

The choice must be made in writing and include a certificate signed by a lawyer confirming that the lawyer explained the effect and implications of the choice. The notice must be delivered to the executor or administrator. If no New Zealand grant has been issued, it is delivered through the appropriate High Court registry. citeturn450583view0turn450583view1

The executor should record:

– Date received
– Option selected
– Lawyer’s certificate
– Person serving the notice
– Method of delivery
– Assets affected
– Any court proceeding filed
– Advice obtained by the estate

Check that the notice relates to the correct deceased person and estate.

Do not assume that an email from the partner’s relative is a valid statutory choice.

## The Six-Month Election Deadline

The surviving partner generally must choose between option A and option B within:

– Six months after the date of death, if no grant of probate or letters of administration is required, or
– Six months after the New Zealand grant of probate or letters of administration, where a grant is obtained.

Court guidance summarises the timing as no later than six months after death or six months after the grant, depending on the estate’s administration pathway. citeturn450583view0turn450583view1

The executor should record both:

– Date of death
– Date of the grant

Do not assume that the six-month period always begins on the date of death.

Where the estate requires probate, the grant date will commonly be central.

## Court Proceedings Have Their Own Deadline

Making the choice and beginning court proceedings are not identical steps.

Community legal guidance states that proceedings generally must be started within 12 months of the relevant date, either death or the grant of administration depending on the circumstances. An extension may be possible, but the court will not ordinarily undo distributions completed before it receives the extension application. citeturn450583view1

This distinction matters to the executor.

A partner may serve an option A notice but still need to negotiate or commence formal proceedings if the classification and value of property cannot be agreed.

Do not treat the election alone as a complete final calculation.

## The Choice Is Usually Irrevocable

Once a valid option is chosen, the survivor generally cannot simply change their mind.

The prescribed notice expressly warns that the election cannot be revoked. The court may set aside a choice in defined circumstances where enforcing it would be unjust, provided an application is made before final estate distribution. citeturn251899search9turn450583view0

This is why the lawyer’s certificate is important.

The executor should not pressure the survivor to choose quickly merely because beneficiaries want payment.

Nor should the executor suggest that the choice can easily be corrected later.

## What If the Surviving Partner Chooses Option A?

After a valid option A election, the executor must help determine:

– What is relationship property
– What is separate property
– The value of each item
– The relevant debts
– Whether any agreement changes the ordinary rules
– What share belongs to the surviving partner
– What remains in the estate

The general starting position in a qualifying long-term relationship is commonly equal division of relationship property. The other half generally remains available to the estate, subject to any adjustments or orders. citeturn450583view1turn251899search35

The executor should not simply transfer half of every asset.

The final division may involve:

– The survivor retaining the home
– The estate receiving other assets
– A balancing payment
– Sale of property
– Transfer of investments
– Adjustment for debts
– Recognition of separate property
– Compensation orders

The division should be documented through a valid agreement or court order.

## Option A May Cancel Will Benefits

A surviving partner who chooses option A will generally not also receive the benefits left to them under the will, unless the will clearly intended both benefits to be received or the court finds that excluding the testamentary benefit would cause injustice. citeturn450583view1

This prevents automatic double recovery.

Suppose the will leaves the partner:

– The family home
– $200,000
– Half the residue

If the partner chooses option A, those gifts may no longer apply in the ordinary way.

The executor must not assume the partner receives both the relationship-property division and every gift under the will.

The will’s wording and any court determination must be examined carefully.

## Contracting-Out Agreements Can Change the Result

Couples may enter agreements stating how their property will be classified or divided, including what is to happen on death.

A valid contracting-out agreement can replace ordinary statutory rules for covered property. Current court guidance confirms that couples may agree that the usual relationship-property rules will not apply when one of them dies. citeturn450583view0turn251899search31

The executor should search for:

– Prenuptial agreements
– Contracting-out agreements
– Relationship-property settlements
– Separation agreements
– Variations
– Independent-advice certificates
– Court orders

Do not rely on an unsigned draft or a family member’s memory of an agreement.

Its validity, scope and interpretation may require legal analysis.

An agreement may deal with only one asset, leaving other property subject to the Act.

## Classifying Relationship and Separate Property

Relationship property commonly includes property acquired or used for the relationship, such as:

– The family home
– Family chattels
– Savings accumulated during the relationship
– Income
– Retirement savings accumulated during the relationship
– Businesses developed during the relationship
– Property acquired for common use
– Increases in value attributable to relationship contributions

Separate property may include:

– Property owned before the relationship
– Inheritances
– Personal gifts
– Certain trust distributions
– Property kept genuinely separate
– Assets covered by a contracting-out agreement

Separate property can become partly or fully relationship property if it is intermingled, used for common purposes or increased in value through relationship contributions.

Community legal guidance notes that property inherited or gifted to the deceased may remain separate unless it became mixed with relationship property. citeturn450583view1turn251899search32

The executor should avoid simplistic labels.

A house purchased before the relationship may still produce complex claims after years of mortgage payments, renovations or family use.

## Sole Ownership Does Not End the Inquiry

The deceased’s name may appear alone on:

– The family home
– Bank accounts
– Investment accounts
– Vehicles
– Business shares

That proves legal title, but not necessarily the final relationship-property entitlement.

The Act can require division of property held in one partner’s name.

Community legal guidance also explains that, in the death context, property held individually by the deceased may be presumed to be relationship property unless evidence establishes otherwise, subject to statutory exclusions and qualifications. citeturn450583view1

The executor must therefore investigate classification before treating sole registration as conclusive.

## Joint Property Must Be Analysed Separately

Jointly owned property may pass automatically by survivorship.

For example, land held as joint tenants commonly passes to the surviving joint tenant outside the estate. By contrast, a tenant-in-common share remains part of the deceased’s estate. citeturn450583view1turn251899search21

Survivorship and relationship-property rights are connected but distinct concepts.

An asset passing automatically may still matter to the overall relationship-property calculation. The executor should not exclude it from every analysis merely because it does not pass under probate.

Obtain title records and confirm whether ownership was:

– Joint tenancy
– Tenancy in common
– Sole ownership
– Trust ownership

Every structure produces a different starting point.

## Trust Assets May Still Matter

Assets owned by a family trust do not automatically form part of the deceased’s personal estate.

However, trust arrangements may still be relevant where:

– The deceased transferred relationship property to the trust
– A partner made contributions to trust-owned property
– The trust owes money to the deceased
– The deceased held significant powers
– Transactions are challenged
– The survivor has separate equitable or statutory claims
– Trust property was treated as the family’s property

The executor should not promise that the trust is beyond every relationship-property issue.

Equally, a trust-connected asset should not be inserted into the estate schedule without proper ownership analysis.

Trustees and executors may need separate representation where their interests differ.

## The Executor Must Remain Neutral

The executor may be one of the children whose inheritance will reduce if the surviving partner succeeds.

That creates a conflict.

In the executor role, the person must:

– Preserve assets
– Provide accurate information
– Avoid premature distribution
– Obtain valuations
– Respond properly to notices
– Keep accounts
– Implement any agreement or order

As a beneficiary, they may want to dispute the survivor’s classification or valuation.

Separate the roles.

The executor may require:

– Advice for the estate
– Personal advice as beneficiary
– A co-executor to manage the claim
– Independent valuation
– Mediation
– Court directions

Estate money should not automatically fund arguments advanced solely to protect the executor’s personal inheritance.

## Stop Affected Distributions

Once a credible relationship-property issue is identified, the executor should avoid distributing assets that may be needed to satisfy the survivor’s rights.

This may include:

– The family home
– Sale proceeds
– Investment accounts
– Business interests
– Cash needed for equalisation
– Income generated by disputed property

The executor may usually continue necessary administration, such as:

– Insuring property
– Collecting rent
– Paying rates
– Completing tax work
– Preserving investments
– Selling an asset where sale is prudent and proceeds remain protected
– Preparing accounts

The distinction is between preserving or realising property and distributing the value to beneficiaries.

## The Six-Month Administration Protection

The Administration Act includes conditional protection for certain distributions made after six months from the grant where no relevant application or effective written notice has been served.

That protection can interact with relationship-property claims, but it should not be treated as a licence to ignore a surviving partner whose rights are known or reasonably apparent.

The earlier distribution rules do not erase:

– The partner’s option period
– A valid notice
– Filed proceedings
– Ownership disputes
– The executor’s duty to act prudently

Before distributing after six months in a relationship-property-sensitive estate, obtain advice about the exact notices received and the statutory conditions.

## Prepare a Full Property Schedule

The executor should prepare a detailed schedule covering property held by both partners.

Include:

– Land
– Bank accounts
– Investments
– Retirement savings
– Vehicles
– Businesses
– Company shares
– Trust interests
– Household contents
– Insurance proceeds
– Debts
– Loans
– Overseas property
– Digital assets

For each entry, record:

| Item | Legal Owner | Date Acquired | Value | Possible Classification |
|—|—|—|—:|—|
| Family home | Deceased | During relationship | $920,000 | Likely relationship property |
| Inherited investment | Deceased | Inherited in 2018 | $140,000 | Possible separate property |
| Joint account | Both partners | During relationship | $36,000 | Relationship property |
| Business shares | Deceased | Before relationship | $480,000 | Classification requires review |

The schedule should distinguish confirmed facts from disputed assumptions.

## Use Appropriate Valuation Dates

The relevant value may not always be the date-of-death figure.

Relationship-property proceedings can involve valuation at a later hearing or division date, depending on the legal issue and any court direction.

Values may change while the estate is administered because of:

– Property-market movements
– Business performance
– Investment returns
– Rental income
– Debt repayment
– Repairs
– Executor decisions

Community legal guidance notes that the death-related regime may include property or income earned by the estate in the relevant relationship-property analysis. citeturn450583view1

The executor should preserve:

– Date-of-death valuations
– Current valuations
– Sale proceeds
– Income
– Expenses
– Reasons for value changes

Do not rely on one informal appraisal for every purpose.

## Debts Must Be Allocated Correctly

Dividing assets without analysing debts can produce a misleading result.

Relevant liabilities may include:

– Mortgages
– Personal loans
– Tax
– Business debts
– Joint credit
– Guarantees
– Trust loans
– Family advances
– Property expenses

The issue is not only whether the debt exists but whether it is:

– Relationship debt
– Separate debt
– Estate debt
– Jointly owed
– Secured against a particular asset

The executor should avoid paying a disputed personal or relationship debt from estate money without confirming the correct responsibility.

## The Family Home Often Creates the Greatest Pressure

A surviving partner may still be living in the home while beneficiaries expect it to be sold.

The executor should not attempt to remove the survivor merely because the will gives the house to someone else.

First determine:

– Legal title
– Joint-tenancy rights
– Relationship-property rights
– Occupation rights
– Will provisions
– Contracting-out agreements
– Mortgage responsibilities
– Insurance
– Whether an option A election is expected

The property may ultimately be:

– Transferred to the survivor
– Sold with proceeds divided
– Retained temporarily
– Offset against other property
– Distributed under the will after the claim is resolved

Communication should remain neutral.

## Mediation Can Prevent the Estate From Being Consumed

Relationship-property proceedings can become expensive because classification and valuation affect many assets.

Mediation may help the survivor and beneficiaries agree on:

– Who keeps the home
– Valuation
– Debt allocation
– Business ownership
– Cash equalisation
– Treatment of will gifts
– Legal costs
– Payment timing

A settlement should be documented through a legally effective agreement, with independent advice where required.

Do not rely on a family conversation followed by informal transfers.

The agreement must be suitable for implementation by the executor and consistent with tax, title and creditor requirements.

## When Court Proceedings Are Required

The Family Court can determine:

– Whether the relationship qualifies
– Which assets are relationship property
– Which assets are separate property
– Values
– Debt allocation
– The appropriate division
– Compensation or adjustment claims
– Whether a late choice or application should be permitted
– Whether an election should be set aside

A relationship-property order records the court’s findings about classification, value and division. citeturn251899search40

Once served with proceedings, the executor should:

– Record all deadlines
– Inform co-executors
– Preserve the disputed assets
– Obtain legal advice
– Maintain complete accounts
– Avoid inconsistent statements
– Continue necessary estate protection
– Keep beneficiaries appropriately updated

## What Happens After the Claim Is Resolved?

Once the relationship-property position is settled or determined, the executor should rebuild the estate accounts.

Begin with:

1. Gross property originally identified
2. Remove assets passing by survivorship where appropriate
3. Apply the relationship-property division
4. Add or deduct balancing payments
5. Confirm estate debts and expenses
6. Identify what remains subject to the will
7. Determine whether the partner retains any testamentary benefits
8. Recalculate beneficiary entitlements

The final estate may look very different from the inventory prepared immediately after death.

For example, a home expected to pass to children may be transferred to the partner, while the estate receives a smaller cash equalisation amount. The children’s entitlement then applies only to the estate that remains.

## An Executor’s Relationship-Property Checklist

### Immediately after death

– Identify every possible surviving partner.
– Secure the will and relationship-property agreements.
– Record death and grant dates.
– Avoid promising distributions.
– Confirm ownership of major assets.

### Before applying the will

– Distinguish sole, joint, trust and company property.
– Prepare asset and debt schedules.
– Obtain preliminary valuations.
– Identify possible separate property.
– Ask whether the partner is obtaining advice.

### When an election is received

– Check the written notice and lawyer’s certificate.
– Record the date of service.
– Pause affected distributions.
– Obtain estate advice.
– Begin classification and valuation work.

### During negotiations or proceedings

– Remain neutral.
– Keep estate and personal legal positions separate.
– Preserve income and sale proceeds.
– Maintain insurance and tax compliance.
– Consider mediation.

### Before distribution

– Confirm the choice and claim have been resolved.
– Implement the agreement or order.
– Recalculate the estate.
– Apply the will only to property that remains.
– Obtain receipts and retain complete records.

The executor’s duty is not to protect the estate from the surviving partner.

It is to determine what legally belongs to the estate in the first place.

Only after the survivor’s ownership rights have been resolved can the executor know what the deceased was legally able to leave behind.

## Frequently Asked Questions

### 1. What rights does a surviving partner have when their partner dies?

A surviving spouse, civil union partner or qualifying de facto partner generally chooses between taking under the will or intestacy rules, known as option B, and seeking a relationship-property division under the Property (Relationships) Act, known as option A.

### 2. How long does the surviving partner have to choose?

The choice generally must be made within six months after death where no grant is required, or within six months after probate or letters of administration is granted where the estate requires a grant.

### 3. Does the election need to be made formally?

Yes. The choice must be in writing and accompanied by a lawyer’s certificate confirming that the implications were explained. It must be delivered to the executor or administrator, or to the appropriate High Court registry before a grant exists.

### 4. Can the surviving partner receive relationship property and gifts under the will?

Usually, a partner choosing option A will not also receive the will benefits, unless the will clearly intended both or a court determines that excluding the gift would be unjust.

### 5. Does property in the deceased’s sole name belong entirely to the estate?

Not necessarily. Sole legal title does not prevent the asset from being classified as relationship property. Ownership, acquisition, use, contributions and any agreement must be considered.

### 6. Can a de facto partner make a relationship-property claim?

Yes, commonly where the de facto relationship lasted at least three years. Shorter relationships may qualify in limited circumstances involving a child, substantial contributions and serious injustice.

### 7. Can the executor distribute the estate while the partner is deciding?

Distribution may create significant risk where relationship-property rights could affect the assets. The executor should preserve affected property, record the relevant deadlines and obtain advice before paying beneficiaries.

### 8. What happens after the relationship-property division?

The surviving partner receives the property or value allocated to them. The deceased’s remaining share forms part of the estate and is then administered under the will or the intestacy rules.