This week, it has been one year since New Zealand went into a Level 4 lockdown in response to the outbreak of Covid-19. Before the lockdown it was difficult to predict how much the virus could come and disrupt so much in such a short amount. One year on a lot has changed.
Family law has not been immune to these changes. In some respects Covid-19 has complicated the separation process for some parties but not all changes have been negative. Below are five observations of things that have changed in family law since last year.
1. More complicated property valuations
When a couple divides their relationship property, they will usually obtain a valuation of the family home to assist with determining a fair division of property. However, the property market has been changing at a rapid pace over the past year. Some parties have tried to time the valuation strategically to maximise their position. One party may argue that an old valuation should be relied upon because the property value has increased, and they do not want to have to compensate their partner for that increase by giving up other relationship property.
Usually a property valuation will be valid for around six months. In regions where house prices are rapidly changing, this period has been even shorter. This has made separations difficult if the parties cannot reach a swift resolution.
2. Speculative assets
People are becoming more interested in a range of speculative assets. This year we have seen more clients with cryptocurrency and unique share purchases (such as GameStop). Cryptocurrency presents unique challenges to both lawyers and some parties who lack of understanding of how they work. Determining the value of cryptocurrency can be difficult as it fluctuates often.
3. Complicated parenting arrangements
Parenting arrangements were disrupted last year by the various lockdowns. Separated parents had to navigate how to share care during a pandemic. If the parents did not live close to each other, contact with their child may have been disrupted. Parents often disagree on various rules for their children such as how much screen time they should have. Covid-19 presented additional decisions including the use of masks, whether to send the children to school when alert levels were raised, travelling around the country and attending large events. It is possible that some parents may disagree on whether their child should receive the Covid-19 vaccine when it is available.
Parenting arrangements can also become complicated if one party wants to relocate. Auckland has experienced four lockdowns over the past year. The lockdowns and rising house prices are inspiring more people to relocate to other regions. If the relocating parent has care of the children, they need permission from the other parent. In providing that permission, the other parent risks being separated from their children if the region or country goes back into a Level 3 or 4 lockdown.
4. Trusts Act 2019
A new Act governing trust law came into effect in January 2021. The Act clarifies the core principles of a trust and the duties of trustees. It imposes stricter duties on trustees to report to beneficiaries about basic trust information. The onerous duties have caused trustees and trust advisors to act more cautiously when trust property is involved in a separation dispute.
The Act also provides mechanisms for alternative dispute resolution, such as mediation. Instead of applying to the Court, a trustee can first refer a dispute to mediation (or another form of alternative dispute resolution) if all parties agree. This can allow parties to reach a resolution sooner and provide more flexibility in the outcome.
5. Zoom and phone meetings
During lockdown, everyone became very familiar with Zoom. It allowed us to have meetings virtually – both in our professional and personal lives. Over the past year many people have continued to have meetings via Zoom. We have found clients often prefer to talk from the comfort of their home. This reduces travel time and the cost of parking.
Zoom has also allowed certification of documents to be done remotely. Previously the parties had to be in the same room at the same time. A necessity of lockdown was that the rules were eased to allow documents to be certified on a video call. This is another practice that has continued beyond the lockdown.
Covid-19 has changed everyone’s lives – sometimes for the better, sometimes not. Separations are becoming more complex in some respects, but technology has helped facilitate more efficient communication. Parents have had to navigate new challenges. However, a greater emphasis on alternative dispute resolution will help speed up the separation process.
• Jeremy Sutton is a senior family lawyer, specialising in divorce cases where there are significant assets, including family trusts and complex business structures.
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