The Ex-Files: My husband is threatening to sell our home

Can my husband force a quick sale of our family home, which is in a trust? Photo / 123RF

COMMENT:

Q. I am currently splitting from my husband of 14 years. Our investments, including a rental and the family home which I am still living in with our children, are in a family trust. Both of us are equal beneficiaries. Now my husband is threatening to demand a quick sale of the family home/farm (which also provides me with my income) if I don't agree to gift him half of my overseas inheritance. What sort of standing do I have?

A. Your inheritance

Once you have been in a relationship for more than three years, your assets are considered relationship property and shared equally between you if you separate. However, there are some types of property which are classed as separate property, which means one partner alone has legal entitlement to that property. This includes inheritances.

You need to be aware that your separate property could become relationship property if it is intermingled with relationship property. For example, if you used your inheritance to pay off any debts (including a mortgage), the money would be classed as intermingled and would become relationship property. This means you would need to halve it with your husband.

If your inheritance is kept separate, then you are not legally obligated to share it with him.

Sale of your family home

As your home is in a trust, what happens to it will depend on how the trust is set up. The home is not the personal property of you or your husband, so your husband cannot do what he likes with the property unless the trust deed permits it.

You mention that you and your husband are equal beneficiaries. I'm assuming you are also both trustees of the trust. Sometimes trusts also have an independent trustee, for example your lawyer, a friend or family member.

Your trust deed will state the conditions for making decisions, which would include selling trust property. For example, decisions can be made by the majority of trustees or must be unanimous.

If your husband isn't able to force a sale under the terms of the trust deed, then he would need to apply to the Court for an Application for Sale.

Application for Sale

Getting a court order can be a slow process. Once you've applied, it can take 12 months or more for your case to be heard. The judge will consider your situation in context, including your assets, debts, incomes and the needs of your children. You write that your family home/farm provides your income – that would certainly factor into the judge's decision.

Going to court will be expensive for you and your husband, and neither of you can be certain of the outcome.

Next steps

You should review your trust documents to see what powers the trustees have to make decisions about the trust property.

Given your situation is complicated and your husband is making threats, I recommend you meet with a lawyer to discuss your rights and options.

Do you have a family law question? Email it to js@bastionchambers.co.nz. Questions should not exceed 200 words. Please provide a phone number. Your name will not be published. Jeremy cannot answer all questions, correspond directly with readers, or give legal advice. Jeremy's advice is of a general nature, and he is not responsible for any loss that any reader may suffer from following it.

• Jeremy Sutton is a senior family lawyer, specialising in divorce cases where there are significant assets, including family trusts and complex business structures.