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Buying property with family or a partner, what could go wrong ... · The Curve

0:00
Today, we are doing Curveballs 2.0.
0:03
So we did a conversation, Vic, do you remember?
0:05
It would have been probably two years ago.
0:07
We had a whole lot of anonymous submissions that came in from people who had kind of dire, hairy, scary conversations that they had to have with their partner.
0:16
They were in dilemmas over...
0:18
like prenup sagas.
0:20
It was quite juicy.
0:21
Do you remember it?
0:21
We had Dr. Love on the podcast.
0:23
Dr. Love.
0:24
Yeah.
0:24
The curveballs.
0:25
Yeah.
0:26
So she was basically, I can't even, I think she's a psychologist based in Australia and she came on to help us navigate some of them because we read some of the submissions that came in and we're like, oh God, we totally can't answer these by ourselves.
0:38
Not qualified.
0:40
In today's episode, we have Holly Egerton on the show.
0:43
She's a lawyer, a founder of Succession, and she is helping us navigate some curveball questions that relate to property, prenups.
0:51
There are some pretty scary ones in there.
0:53
I love that the Curve community sends curveballs.
0:55
I know.
0:56
Gosh, there's some...
0:57
harrowing stories.
0:58
I know harrowing is actually a really we shouldn't laugh because there are some dire stuff that comes in but what an honor that people trust us with these juicy stories.
1:06
We're like financial therapy.
1:08
Yeah but yes we have Holly in to answer some of these because we really needed a lawyer and someone that had experience navigating these situations.
1:14
The main takeaway I will say Vic.
1:17
Can you guess, actually?
1:18
Do not date him.
1:21
No.
1:21
I would say the overarching theme is just anything that you talk about, you've got to have it in writing.
1:26
The amount of times.
1:28
And with these particular stories we're going to look at, you just are like, oh, my God, if only you had that written down.
1:34
So today is a juicy one.
1:35
But first, before we get into it, we've got a quick word from today's sponsor.
1:38
Welcome back to another episode of the Property Podcast.
1:41
This one's proudly sponsored by BNZ because when it comes to home ownership, they've basically seen it all.
1:46
Whatever your journey looks like, BNZ's got the know-how to help you find your way there.
1:50
So let's get into the episode.
1:52
Okay, Holly, you've flown all the way from New Zealand.
1:56
I'm going to just claim you've done it specifically for the podcast.
1:59
Absolutely.
2:00
I know you came for a European holiday, but we'll just claim it.
2:03
How fun.
2:04
So we've recorded two episodes with Holly.
2:06
They've been remote, so you've been dialing in from New Zealand.
2:09
how does it feel to be in the studio?
2:11
Oh my God, I'm so stoked to be here.
2:13
This is wild to be doing it in person.
2:15
So we've had such amazing feedback on the last two episodes we've done with you.
2:19
So for anyone who hasn't listened, definitely go back and listen to them.
2:24
Particularly, I think it was called The Property Story from Hell.
2:27
Absolutely.
2:28
Like the amount of people that have listened and shared that episode.
2:32
So thank you so much.
2:33
I feel like it's one of those, you know, it's kind of like if you don't laugh, you'll cry.
2:37
But sometimes you've got to give it a bit of space before you can even laugh about it.
2:42
So obviously it's happened long enough ago that you can use it as a cautionary tale.
2:46
But it's definitely a good example if you're in a relationship and you're buying property to think about all of this stuff in terms of worst case scenario, what could happen?
2:55
Because unfortunately…
2:57
Things go wrong.
2:57
Things go really wrong sometimes.
2:59
Yeah.
3:00
And we thought it would be quite fun.
3:02
So we did this a couple of years ago.
3:03
I don't know why we haven't brought it back because it was really fun.
3:06
We did an episode called Curveballs.
3:08
And we basically said, if you've got any kind of weird, hairy, scary, awful situation or like a question or something you wanted to talk about, share it with us and we'll talk about it.
3:17
So we did it a couple of years ago and we had a whole lot of people submit their questions and stories.
3:22
And then when we shared your two kind of property horror stories, I was thinking, God, it would be really interesting to see if there's people who would love their story, whether it's in hindsight or happening in real time, either talked about in hindsight and giving feedback as to how you could have done it better.
3:39
Yeah.
3:40
Or people that are going through actually complicated, not ideal situations, if they wanted to share their story and we can answer it.
3:47
So we've had lots of people submit curveballs with regards to properties going wrong or, you know, weird stories that are happening.
3:56
So I was actually thinking we could move through each of these stories, talk about it, give some advice.
4:02
Obviously, if you're listening to this, probably.
4:05
And I mean, to be honest, we might have to say, speak to an actual lawyer for some of these.
4:10
But hopefully sharing these will give people an idea of what.
4:15
What other people have done or should do in certain situations.
4:18
I love it.
4:18
Because don't you think, it's kind of this weird thing I've definitely felt with business.
4:24
Like if you're in a, if you're in like a workplace, for example, and you've got five managers above you, you learn from all the people above.
4:32
Whereas if you're starting your own thing, often you just learn.
4:35
from your own mistakes.
4:37
Like you'll fumble, you'll learn.
4:39
So in the same way that you can learn in that kind of a setting better when you have managers or people to learn from, I do feel like sharing some of these stories, hopefully people can prevent themselves from getting into similar situations.
4:53
Yeah.
4:54
Learn from other people's unfortunate situations.
4:58
But you must hear a lot of stories like this.
5:00
Oh, yeah.
5:01
How do you balance?
5:02
Because you're obviously like, you know, our age and like, I don't know, I feel like there's some of these stories when I was looking at them, I was like, God, this is heavy.
5:10
It's like a lot to...
5:13
talk through with someone, deal with, do you ever find it like too much?
5:19
It's almost therapy territory.
5:21
Literally.
5:21
I swear most of your job when you're dealing with relationship property is therapy.
5:26
Like you're sitting there and it is like a therapy session when you're going because it's so emotional and I totally get it.
5:31
And I think because I've been through it, I can relate and understand, but also try and help people pull in and be like, okay,
5:40
we do need to save that for a therapist and let's not at my early crate when I was doing that at whatever charge out rate I was at.
5:49
Um, but like be sympathetic, but also kind of tell them the facts and the truth and what actually does matter and what doesn't.
5:56
Cause I think the hard thing is, it's so emotional and people get caught up in the story and the things, but
6:02
Yeah.
6:03
Yeah.
6:03
At the end of the day, it's like, this is the law.
6:05
Yeah.
6:06
This is kind of what you have to do.
6:07
You're in a business relationship.
6:09
Yeah.
6:09
You kind of have to treat it like one.
6:11
And that's why having these conversations early is so important.
6:13
Because when you're in the thick of stuff going wrong, you do not want to hear, well, sorry, the law is this.
6:19
Or, you know, if you can go through the therapy stuff.
6:23
all the hard conversations before that's why yeah I know so many of us avoid these conversations but it's so I know I even when you were talking the other day I was you know about being uncomfortable to talk about the finances and things like that and I think that's the same it is sitting down and being like okay I'm gonna have to get comfortable myself and then also to bring that to your partner which is hard like I don't discredit that and I think obviously I can
6:49
talk about prenups and try and normalise them and options and things, but I've been doing it for 10 years and it is normal for me and it's not emotional for me because I've seen it where I totally understand it's not, which is a whole reason why...
7:04
Like, yeah, I'm looking to try and be able to change that and educate people because I think once you can, like even what we'll go through hopefully today is like talking about stories and people hearing, going, oh, similar to me, they can recognise themselves and know when they need to do something or that they can do something and not think that they don't have options.
7:21
Yeah, it's, yeah.
7:23
I mean, I would be interested to know someone who's had it happen now twice in a less than ideal situation.
7:31
turn of events.
7:32
For anyone that hasn't listened, honestly, really highly recommend going back and listening.
7:36
We'll link both of them in the podcast show notes.
7:38
But if you were in a relationship now and you were starting to have a conversation with someone, let's say it was getting serious and you really loved them and you wanted to be in a partnership with them,
7:49
How would you personally strike the balance of having these conversations in a way that didn't make it then all of a sudden feel like you were on separate teams?
7:56
Yeah.
7:56
Because I think, and I was talking to someone the other day who'd been on the podcast and she's about to move overseas with her partner and, you know, they're not married yet or engaged yet, but she's starting to think, yeah, okay, I'm going to have to have these conversations.
8:10
and she was saying i almost feel like i want to get in the room with a therapist and my partner to help navigate because i don't want to say something offensive like i we have such a great relationship and i love him and i want to be with him and i don't because up until now the conversations and the way we've spoken is that we're on the same team yeah but the conversations that we have to have is pre-empting not being on the same team and how do you i don't know like navigate that so
8:35
for you personally, like how do you think you would approach it if you were in this situation?
8:40
Yeah, so I think...
8:43
you are on the same team and it's so much easier to have these conversations now while you're both on the same part, like side versus later.
8:49
And I think approaching it is going, I mean, you already sort of start having them slightly without actually saying it, you know, at the moment, are you doing joint accounts for bills?
8:59
Are you doing joint savings accounts?
9:01
Are you doing separate accounts?
9:02
Like that's already starting the conversation just by what you're doing already in your life.
9:06
And I think it's just expanding on that being like, Hey,
9:10
I guess it depends on where you're going.
9:12
Have you just got an inheritance or has somebody earning way more?
9:15
Are you talking about starting a family?
9:17
Are you talking about starting that joint savings account?
9:20
Because I think that leads into the conversation to be like, okay, are we on the same path?
9:24
Or if you have...
9:26
got equity in a home and you're letting somebody, like, if it's at that moving in point, I think there's, like, triggering points to bring the conversation up, not just randomly, like, on a date and just being like, okay, like, right, let's talk prenups as you sit down.
9:40
I think it's when you're in the motion of, you know, starting to talk about combining paying for bills together, like, when you're moving in together or starting to talk about, like, are we saving, are we investing or career changes or...
9:52
family, but that's your triggering point to go, okay, we need, like, can we get on the same page in terms of finances and what does that look like in terms of, do you go, what's mine is mine, what's yours is yours, and is that fair?
10:07
when you're starting.
10:08
I think the big impact is when particularly people, like, have a family is the big change because that really does impact somebody's earning potential and somebody's financial position in the long term.
10:19
And it's not just in that period of having a child, you know, at all.
10:24
It can go way beyond that and going, I think to me, that's the real main timing to have that conversation.
10:30
It's just so hard.
10:32
Like I'm thinking about my own personal situation.
10:35
I feel like it's fine because I've never said his name and he never listens to the podcast.
10:38
He's on all the social media.
10:39
It's literally hoping he listens to this.
10:41
But –
10:42
He is now not earning.
10:43
He's in between jobs because he's had his own business.
10:46
He now has two other businesses he's starting.
10:47
So he's not in a normal situation where he's on a salary.
10:50
Yeah.
10:50
Obviously, I own my own businesses and I'm paying myself, but way less than what he would be earning.
10:56
He also has way more assets and money than I do.
10:59
But...
11:01
It's this really weird thing where like, well, I have a salary right now and I'm being paid, but he has way more money than I do.
11:08
So it's like, does that then mean that I should be paying for more because he's not, you know, like there's just, yeah, it's so interesting because it's like, why should he go into his savings?
11:18
But then also it's like, I'm not really earning enough to be able to support, you know, it's just, it's really weird.
11:23
Cause it's like, on the one hand, if I was starting a business and I had no money coming in, I probably, it'd be really helpful to have someone else helping you through that period.
11:31
But he has more of a financial backstop than I do.
11:33
So it's like, it's just a, it's a really weird dynamic to be like, I don't know how or what the best thing to do is.
11:38
Yeah, totally get that.
11:39
Probably should have this conversation with him.
11:41
Yeah.
11:41
But also... Not on the podcast.
11:44
And I think it is.
11:45
It's going, okay, we're in a different position now.
11:47
Because obviously he was earning prior to now.
11:49
But now, like, you're at that point where it's like, okay, am I supporting you through that?
11:52
I mean, I could have bit.
11:53
But, like, I mean, I've probably got £300 spare.
11:56
Yeah.
11:56
You know, like, it's not like, no, I'm not supporting it.
11:59
You know, like, do you want a yogurt for lunch?
12:01
Like, there's not a lot that I can do in terms of, like, actually supporting.
12:05
Yeah.
12:05
I can, I guess I could cut down on all of my, the stuff I do that I want.
12:09
That's not, like, needs.
12:10
Yeah.
12:11
Has he asked you to, like, help?
12:12
No, absolutely not.
12:13
But I shouldn't really assume it, like, because we went out for dinner last night with my family.
12:18
And he went in and bought our dinner.
12:19
Everyone, like, paid separately.
12:21
And I just had this moment of thinking, like, he doesn't have a celery right now.
12:24
Yeah.
12:25
I do.
12:26
Sometimes there's a situation where somebody does support you and enables you to build your business and do that, and that's where I do think you need to have the conversations going, is it fair that we share this?
12:36
Or if you have sort of done it, yes, like they've been there and it's been nice, but they haven't, like it's been you really that's built this business, not with their financial support, emotional support, like you know...
12:47
saying, well, I have built this and I want to protect that.
12:49
Because I sort of felt like that when I built my business.
12:51
I was like, my partner at the time hadn't supported this sort of everything.
12:56
Like, I was doing all the late nights.
12:57
I was still self-sufficient, like, paying, like, you know, earning my income, paying my share.
13:01
And I was like, I don't want you having half of what I'm building because you haven't really contributed to it.
13:07
Like, you haven't.
13:08
Where if they had...
13:09
completely different position.
13:10
But I honestly think it is having that conversation and going, you know, are you helping me with the intention of like this is something you want to be involved in or are you helping me out of just being my partner?
13:20
Because we also, you know, people also do that.
13:22
Like we have friends, we have family who are still willing to do something, not because they're hoping to get something out of it.
13:27
Yeah.
13:28
So I think, I know it's hard, but, you know, having that conversation and going, you know, are you wanting something from this or are you okay that –
13:37
this is mine and you're just helping me because we're in a relationship.
13:40
You're not expecting something can return.
13:41
I think it's hard to have that conversation, but having clear expectations from the beginning.
13:48
Honestly, the fact that I'm talking about this on a podcast with so many thousands of people listening and cannot have the conversation in my own home is bizarre.
13:58
Yeah, I almost feel like having the conversation with yourself on if it went, if it turned to shit,
14:06
in 5, 10, 15, 20, two months, whatever, are you okay?
14:13
What are you okay with?
14:14
Yeah, I think that's the thing.
14:16
And I think it's understanding what are you okay with is knowing what the position is if you do nothing.
14:23
I think that's the big thing, is a lot of people are actually unaware of what the rules are or what the law says if you don't have that conversation yourself.
14:30
So...
14:31
People are uncomfortable to have the conversation, but they don't even know what the backup position is if you don't have that conversation.
14:37
I think that's a big thing as well is we all want to avoid it, but none of us even know that if we don't have the conversation, what has the government decided for us anyway?
14:45
That's the big thing as well is without having the conversation, you're still unaware of even what the default rules are.
14:52
And I think that's where people need to.
14:54
educate themselves on is going, what is our position if we don't have this conversation?
14:58
And then go, are we actually okay with that as well?
15:01
I think that's the first step is actually even knowing what that default position is.
15:05
So we're going to move on to our first curveball.
15:08
So these are all property focused.
15:09
So we specifically asked for off the back of your
15:13
property experience from hell, what situations have people found themselves in and what would you like to be sort of discussed or what advice would you like?
15:22
So we've given pseudonyms to a few because people wanted to remain anonymous.
15:25
So I'll read it out and then we can discuss.
15:27
what Steph should be doing.
15:30
Yeah.
15:30
So we bought a holiday house with my husband's cousin and her husband.
15:35
So that couple, the cousin and the husband had been married for 25 years.
15:38
There was no property agreement because family.
15:41
So they were sort of just like, okay, we're family.
15:43
This is so easy.
15:45
And also they thought because they've been married for 25 years, it's obviously proof enough that they're in a good, solid relationship.
15:51
So they all agreed that the beach house was for the kids long term.
15:54
So no need to worry.
15:55
The idea is this is being passed down to our kids.
15:57
It's going to be in the family.
15:59
Nine months later, he left her, met someone new within six weeks.
16:03
Are we thinking there was crossover?
16:05
Yeah, most likely.
16:06
The cousin who had been family to us turned into a woman scorned.
16:10
So all of a sudden she was like, F you, you've left me.
16:13
Shit, shit, shit.
16:15
And it stayed that way for about six years.
16:18
We tried to sell.
16:18
We tried to settle.
16:19
She said no over and over and over again.
16:22
And the drama just kept coming.
16:23
It's been a wild ride.
16:25
The question for you, Holly, is what should they have put in place at the start to avoid being dragged into someone else's divorce for five and a half years?
16:32
That is crazy.
16:33
Imagine having to deal with it for that long.
16:35
It's not even you.
16:37
And is it true that going to court and being forced to sell is the only option for people in that position?
16:44
Because for them, that was the situation that they were in.
16:46
Yeah, it is.
16:48
which is wild.
16:49
Oh my God.
16:50
Wild to think that you have to go to court to get a court and sale.
16:53
So if they're not partaking, that's your only steps, which obviously you're then incurring the costs of a lawyer to prepare and file your application.
17:00
Then you've got delays waiting for your court time to get heard.
17:03
So it's never going to move quick.
17:05
And that is exactly why, even with family, everyone should definitely put a property sharing agreement in place because it just puts timelines on things and you've got a contract to enforce.
17:15
If you don't have an agreement,
17:18
everyone's just floundering.
17:19
It's that whole thing of going, what do we do?
17:21
How long is it going to take?
17:23
Where do we even start?
17:25
They've separated, so it's not just a separation that somebody's dealing with.
17:28
It's now a friendly property sharing arrangement, which so many people do.
17:32
Like you think, I know so many people who go, let's buy a family batch and we're going to share it.
17:36
I mean, it's a great idea.
17:37
And I also love the idea of it being bought and thought of as this sort of like inheritable, passed down asset.
17:44
I think that's amazing.
17:45
But yeah, it's just never assumed.
17:47
Yeah, practicalities.
17:48
Because I'll talk to parents who go, I want to leave this house to my kids and I don't want anyone to sell it.
17:54
And I'm like, great idea.
17:55
But the reality is, is they're all going to end up with their own families.
17:58
Somebody's going to end up using it more than someone else.
18:01
And who's getting Christmas?
18:03
Who's getting the New Year timeframe?
18:05
Things go wrong.
18:06
And it might not be your kids.
18:07
It can be partners that come in.
18:08
It could be your kids.
18:09
Who knows?
18:10
Things go wrong.
18:11
So what happened with them is because they couldn't agree and she was like, no, I won't sell.
18:15
No, I won't sell.
18:16
They were then forced to go through the court.
18:18
Yeah.
18:19
And so is it like it's a forced sale?
18:21
Yeah.
18:22
So you'd have to get a court order, which they're saying, where if you have an agreement, you can say...
18:27
So if anybody wants out at any point, you give notice and then you've got 30 days to, usually a little bit longer, maybe like 60 days to reach an agreement.
18:37
If you can't reach an agreement, an independent valuer is appointed.
18:40
So that's all drawn out in your agreement.
18:41
If you can't agree on a valuer, then it's appointed by...
18:44
like in New Zealand we say like the Law Society, and they then set the value.
18:48
Here's the option if you don't want to agree.
18:50
So it's got timeframes where you can do things.
18:52
So it's going to be dragged out even more, basically.
18:54
You've spent five and a half years trying to come to agreement, and then you might spend another three years.
18:58
Not if you had the agreement in place at the beginning.
18:59
If you had the agreement in place at the very start...
19:02
it shouldn't have taken five and a half years because you've got an agreement that you can enforce, which says, here's what we agreed in writing before owning this house.
19:10
You haven't complied and you should be able to go to get a court-ordered sale a lot quicker.
19:14
But as a court-ordered sale, well, how does that work?
19:17
do you still get to say, I don't want to take that price?
19:19
Or are you kind of forced?
19:20
No, by that point, no, yeah, no.
19:22
So how does that work?
19:24
Are they like, cool, we're going to put this house on sale and they just take the first person that comes through?
19:28
Yeah, like the court will appoint like an agent generally and then the agent opens up the listings, basically.
19:35
you'll have a registered valuation, but at the end of the day, a price, you can't choose, unless everyone said, no, we don't want to sell, but I'm presuming in this situation, you're selling for whatever the price is, you just need somebody to force that sale, so the court will put a, and you'll just have to take whatever price that gets offered.
19:50
You'd be quite stoked to be on the other side of that.
19:52
Yeah.
19:52
Sometimes you can put margins, like I've seen in, actually in personally my court order sale.
19:58
From experience.
19:58
Yeah, that you had margins and that was based off valuations that had been supplied to say like within this price range.
20:04
Like if you get an offer within that registered valuations minimum, that's it.
20:09
It'd be so devastating if you got a shit amount for it.
20:14
Polly's like, yeah, that's the point.
20:15
Yep, that's the point.
20:16
Okay, moving on to Tash.
20:18
So she said, my parents just got divorced after being together since they were teenagers.
20:22
And honestly, thank goodness.
20:23
They're one of those couples who are always better off apart.
20:26
Quite sad.
20:27
Watching it play out taught me exactly how important it is to get everything on paper.
20:31
Years ago, God, there's such a theme to these stories.
20:34
Okay, years ago, they made a verbal agreement that one would be the breadwinner covering everything, while the other built and renovated their investment property.
20:44
One income for years so that that property could get built up and eventually leased out.
20:49
It worked out and the property got there.
20:51
Then came the divorce and suddenly one parent forgot...
20:54
God, this is iconic that it came from the daughter as well.
20:57
One parent forgot that any financial support had ever actually happened.
21:01
Oh, yeah.
21:03
Weirdly, though, he – so he wanted full ownership of the rental.
21:06
So obviously she was the breadwinner, the wife and mother, and then the husband was doing the renovation.
21:11
He'd done the physical work, he said, and he'd built it himself.
21:15
She wanted an even split because her income had kept the household running –
21:19
the entire time that he was building it.
21:21
And it got really messy, emotionally messy.
21:24
And in the end, she gave in and just wanted to keep the peace.
21:27
A small payout, there was no real compensation for the years of financial support towards an asset that she'd helped create.
21:32
This is so wild that it's the other way around.
21:34
She said, the lesson I'm assuming is don't do verbal agreements and write everything down.
21:38
Who's contributing what, exactly what percentage of his versus his owns the property, is it 50-50 and get it in a contract.
21:45
But the question for you is more of,
21:48
an advice piece.
21:49
She's just said, could you please advise others in terms of combined assets and what things that you should talk about?
21:54
It's so similar to the first one, isn't it?
21:56
Have it in writing.
21:57
Yeah, and that's the thing I think as well.
21:59
Like they clearly established what was a group between them.
22:01
It was like, I'm the breadwinner.
22:03
I'm going to cover these costs.
22:04
Yeah.
22:04
probably shouldn't use that word, but anyway, I am essentially saying, but this is our asset and I'm enabling you.
22:09
So they'd already reached an agreement.
22:11
They just didn't put it in writing.
22:12
And I think that's the thing is that when you're trying to look for the conversation starters as well, going back to that a little bit, it's like, you actually look at what you're doing and it's just formalizing what you are doing in writing.
22:22
It's kind of interesting because now I'm thinking, you know, back to me, back to me.
22:27
Basically, the setup is, even though it's on in writing and we haven't agreed on it, it is really quite a combined shared thing right now because he's helping me a lot and he's also paying for more.
22:41
And we're both building separate businesses, but it is a bit of like…
22:46
A team.
22:46
It is a team.
22:47
That's how we're behaving.
22:48
It's definitely not like what's mine is mine, what's yours is yours, separate.
22:51
It's quite combined.
22:53
So it probably is then for us just being like, is this how we want it to be formalized?
22:56
Do we want this to – are you happy with this?
22:58
Am I?
22:59
What does this look like?
23:00
And even if you're at that point right now going, okay, this is where we are right now and where we are probably moving forward.
23:05
Is there anything that I want to protect prior to that?
23:08
Like is there –
23:09
a certain amount of equity that was already there that you go, hey, look, we're building this forward now.
23:15
But prior to that, say, for example, my business had 300K worth of equity in it.
23:20
I just want to protect that.
23:21
So yes, we're building whatever's forward.
23:23
So if in the future, let's say it's got a million dollars worth of equity, I'll get 300 back because I built that prior to you coming in and helping me.
23:30
But we'll split the future.
23:32
Yeah.
23:32
So just saying like, OK, this is where I kind of was before we, you know, started together and supporting and because
23:38
At the end of the day, like, but it's vice versa, right?
23:41
So for example, for him, it's like he sold a business, he owns a house, he has heaps of assets, too, and he should be able to protect that.
23:47
But I think it's like, it's so funny when you think about it, because it's also like, well, you have to be respectful of both people, what they're bringing to the situation, you know, you can't just think about your own.
23:58
And I do think when it comes to this situation,
24:00
particular issue all he's remembering is what he contributed which is the house and all she's remembering is what i can you know so not the same yeah which sucks it's like the rose tinted glasses in hindsight in a relationship you forget the bad but remember the good it's almost the exact opposite yeah i feel like i'm the poster child for this property does not always go to plan does it
24:23
Oh my God, always.
24:24
Things just come up when you least expect them.
24:26
Suddenly the plan's totally out the window.
24:28
But that's kind of the point of having a BNZ home loan partner in your corner.
24:31
Yeah, you want to have someone that can work through all the curveballs as they come up so you're not stuck dealing with it all on your own.
24:37
Details on how to book in with a BNZ home loan partner are in the show notes.
24:42
Okay, we've got another one.
24:44
Mia, so she said, my partner and I have been together for almost four years.
24:47
There's a gap in what we earn.
24:49
So he already owns a house, where he owned that before we met.
24:53
When I moved in, we signed a contracting out agreement.
24:56
What his stays his, and what's mine stays mine forever.
24:59
So I pay no rent or bills.
25:01
He covers a lot of my living costs, which has let me build up my own investments.
25:04
And,
25:05
I earn around $100,000 with $200,000 net worth.
25:09
God, sorry, quickly.
25:10
That's phenomenal.
25:11
It's so impressive.
25:14
However, he earns $400,000 a year and he has a $4 million net worth and an inheritance coming.
25:23
No inheritance for me.
25:24
I got legal advice and put in a review date in case things change.
25:28
So if we got kids or had, you know, got married or anything.
25:31
Then in your last episode with Holly, she mentioned review dates aren't actually enforceable.
25:35
So now I'm worried that I'm locked into this forever.
25:38
We're not sure about kids, but I think we will be together long term.
25:41
Maybe married soon.
25:42
My hope was that at the review date coming up earlier next year that we would update it.
25:46
So whether we build together going forward as shared while keeping his inheritance and his prior wealth separate.
25:52
But mostly I think about this, if I spent 20 years with him and it didn't work out, am I then left in a bad position?
25:59
Yeah.
26:00
probably never happens, but what if I met someone on an equal financial footing and we then built a life together jointly from day one?
26:06
I would just love Holly's take on how she would approach this situation.
26:09
Yeah.
26:11
Can we pull it apart a bit?
26:12
Because I'm a little bit going on.
26:14
Yeah, yeah.
26:15
So I think from my take is, is he's obviously coming into the relationship with a lot of equity and different earning potential.
26:23
And then he said, I want to protect this.
26:26
But in recognition of that,
26:28
he's obviously covering rent and bills and those types of things, which then obviously is enabling her to build up her net worth and equity.
26:35
Because if you weren't in a position where somebody did have that, you wouldn't be building that probably level of equity that you've managed to build by having somebody cover those costs.
26:44
Where if you were in a relationship where you're starting on equal footing, you wouldn't have built that equity as an individual.
26:48
reality because you would have been paying rent and you would have been paying your bills and things like that.
26:52
So I think it's recognizing, sometimes recognizing the privilege in that position as well.
26:57
And then going, I think everybody's view is different though in terms of saying, you know,
27:03
If you aren't sacrificing, I think if you were then forced to pay equal rent and things like that, you need to go, okay, am I okay with this?
27:12
Or are you okay with going, well, you're covering all these costs that's enabling me to live?
27:18
I think it depends on what, like in their relationship as well.
27:21
Like if this person has all their equity and they do cover all the dinners and they cover the holidays and they cover this because they're in a position to and they want to,
27:29
amazing if they're saying like let's go on all these holidays and all these trips and I want you to pay your part of how you know half of that if things like that very different versus somebody who's going oh you know I'll do this for you and why we're together great and if you separate well
27:47
My position is, should you be entitled to that?
27:50
Have you enabled that?
27:52
Have you advanced it?
27:53
Or is that theirs to keep?
27:57
Inheritance, surely no.
27:58
Yeah.
27:59
But I guess everyone's different, right?
28:00
Because it's also, inheritance is one thing, but then it's like...
28:04
you know, your, the things that you add value to that they may not have added value to, if they're getting access to half, then do you know what I mean?
28:12
Like there's, it's hard.
28:13
Cause I think in this situation as well, let's say they did get married and they did have kids.
28:18
Completely different.
28:19
But is it though?
28:20
Well, should he still be able to ring fence things if it turns to shit?
28:23
I think...
28:25
he could bring friends some.
28:27
I don't think that should mean, okay, everything's in the pot and it's now 50-50.
28:30
I don't think that's probably fair in my opinion.
28:32
That's just my personal view.
28:34
I think it would be completely different if you are now going to have kids and going, okay, at this point you then need to have that hard conversation and go, okay, we signed this agreement saying what's yours is yours, what's mine is mine, which was fine when we were maintaining financial independence and we were living our lives and I could build up my equity and you were covering most of the costs because that worked in our situation then.
28:56
are situations going to change substantially if I have children?
28:59
I'm now going to have to step back from work.
29:01
Everything changes.
29:02
It's not just the time that you have off a child.
29:03
It's like the period where you then have to have out of the workforce before you re-enter and everything takes a hit.
29:09
So my recommendation would be absolutely do not go into that next step until you have in writing an agreement.
29:17
And what that agreement is...
29:19
is different for everyone.
29:20
I don't think it's to say, well, at that point, it has to be 50-50.
29:23
It could be in the event we have a child.
29:26
It's like, well, I've got, you know, it might be that because they're in a position to, you get a home.
29:31
And it's also hard because, I mean, these are conversations where somebody is privileged enough to have that position.
29:37
You know, it's,
29:39
Very different, you know, if somebody doesn't have that, then they don't have that and you just have to deal with it.
29:42
I know, yeah, but it's like this situation, if he's got a huge net worth, like $4 million, and high earning capacity and inheritance, and then they decide to have kids, but how does that change?
29:53
Because, yes, you should be in it together, but, like, if someone has almost...
30:00
like she's got 200,000 and he's 4 million.
30:03
It's a huge difference in assets.
30:06
I think everyone can ring fence the inheritance, whatever.
30:09
Like that's fine.
30:09
That's quite obvious to be separate if that works for you.
30:12
But it's the other stuff that I'm like, how do you even?
30:15
I would be saying personally saying, you know, you want at least a roof over your head.
30:19
They're in a position to do that.
30:20
If you're going to sacrifice your position, your earning potential to maybe be able to give that to yourself one day, it might be like, okay, well,
30:26
I want certainty that if we do go down this path and we have children and you leave one day, that I'm always going to have a roof over my head that I don't have to stress about my rent bills.
30:33
And it might be then in something in addition to go, okay, in addition to that, you've got a far higher earning potential.
30:39
You're also going to have a debt-free home.
30:40
But if you're splitting the kids' custody 50-50 or whatever it is, they're going to be able to give them a much...
30:47
nicer life essentially as well and it's going I want to negotiate now to say if that's the situation maybe it is and I don't mean it doesn't have to be this but like this is just spitballing an idea being like okay well until the kids leave where at that point maybe it is our income is 50 50 and even if you do separate or like you're still paying the pay yeah and saying if we're committing to this child and having a family together
31:13
you can commit to sharing out your income until they are no longer needing to rely on you.
31:20
But even then, it's going beyond that because once the kids are out, your financial earning potential is also impacted moving forward because you've been potentially out of the workforce.
31:30
So it might not even be just saying, well, that might not be enough.
31:32
It might be going, okay, but beyond that, what would be fair recognition is that you do have this massive earning potential and I, again, might not because I've seen that in people where they've separated families.
31:42
and he's earning 400K.
31:45
They were together from 20s, separated at 60.
31:48
Yes, they split 50-50 of the assets, but he's out earning 400K.
31:52
She's now earning minimum wage, maybe 60, 80K.
31:55
And it's like, is 50-50 fair in that situation?
32:00
He's going to be living a very different life, which she thought she was going to be a part of.
32:04
And now she's, yes, she might have a roof over her head, but there's still living costs and everything that go with that.
32:09
So...
32:10
It's to think about, and it's my position for that situation, would be going, do not take that next step until you clarify and not just verbally.
32:20
Because if somebody says, oh, no, now we're starting a family, I would never do that, that doesn't mean anything.
32:25
Yeah.
32:27
So far out.
32:28
It's so complicated.
32:30
Oh, my God.
32:31
Yeah.
32:31
But they've already had that hard conversation at the start.
32:33
So I think it is saying... Yeah, they're good on you for putting something in place already.
32:37
So there's something there.
32:38
But it's more just you've got to figure out what you both think is fair.
32:41
Yeah.
32:42
And it's not just one conversation.
32:44
I think that's it.
32:46
I honestly don't know.
32:46
It's multiple conversations.
32:48
I don't know what the fair thing in that position is.
32:50
Yeah.
32:50
I think it's really, you definitely need independent legal advice.
32:53
Oh, absolutely.
32:54
What are actually the different ways we could think about this?
32:57
And what are the different support networks, systems, things that we could put in place?
33:01
Because I definitely think the inheritance is probably a little bit more straightforward in the sense that like, that's not something you've earned.
33:07
That's for your family.
33:08
Like, that's fine.
33:09
Ring fence that separately.
33:10
Yeah.
33:11
But the asset piece is kind of an interesting one because it's like, if he's built up a huge amount of equity before you guys met and then you do have kids together, does that mean you just automatically get half of that?
33:22
It feels weird.
33:24
But then, but you can't also put necessarily like actual numbers on how much it's impacted you financially having kids, your body, all of that.
33:31
So it's like, there's no like tangible thing.
33:34
Whereas what's tangible is I have 4 million.
33:37
Whereas the other stuff is so like,
33:40
And that's what I find I think everyone struggles with is we're all society driven as figures.
33:47
Like I've worked, I've earned this.
33:49
And it's like everything that has enabled somebody to do that, you need to be able to recognize as well, which is so hard to put a dollar figure on.
33:55
And I think there's no answer.
33:57
Like that is the reality.
33:58
It's one of those things.
33:59
You just have to be okay with it.
34:00
So you make something formal and then you know what the plan is should it turn to shit.
34:05
Yeah.
34:05
That's basically what you need to do.
34:07
Okay.
34:07
Thank you so much for sharing that, by the way.
34:09
That was a really good one.
34:11
Yes, that was a great one.
34:12
I feel bad saying that.
34:14
Super interesting.
34:15
And even if it doesn't, I think as well, maybe having a conversation is not just turning to shit like we're separating.
34:20
Even saying, like, if you passed away.
34:22
God.
34:22
But do you know what I mean?
34:23
Is it doesn't have to be like we're planning for us to break up.
34:26
It could be like, you could be in an accident tomorrow and where does that leave me?
34:30
You know, like, and she's had three kids or whatever the situation may be.
34:33
Yeah, because, I mean, imagine if they got sent to the family, like, you know, the parents, and then they were like, no.
34:39
Yeah.
34:39
Sorry, Mia, you're not, no.
34:41
And you're like, cool, I've got three kids.
34:42
This is really stressful.
34:43
Yeah.
34:44
So I think as well as not just going and going, we're planning to separate.
34:47
It's like sometimes accidents happen and then things go wrong.
34:50
You're in that same position whether you separate or you pass.
34:53
So...
34:54
It's also like nothing's – someone could become – sorry, trigger warning, but someone could not be able to work tomorrow.
35:00
Absolutely.
35:00
Is your plan that you are going to try and support that other person that no longer can work, whichever way that is?
35:05
Yeah.
35:06
You know, it's like are we in a partnership and what does that look like?
35:09
Things change so much.
35:10
much.
35:10
Yeah.
35:11
That 700, or that 400K salary, that could be gone.
35:13
Yes, they've got the inheritance to fall back on, but some people don't.
35:16
You never know.
35:17
Yeah.
35:17
Okay, next one.
35:18
Lucy said, we are looking to buy our first property in London after my boyfriend received a, oh my God, a $600,000.
35:28
No, £600,000 inheritance from his grandmother passing away.
35:32
Sorry, I shouldn't be smiling.
35:33
That's actually really messed up, but holy moly, that's a lot of money to inherit.
35:37
Um,
35:38
The grandma's been doing some very clever investing.
35:40
Yeah.
35:41
So I'm contributing 15,000 pounds.
35:44
We will pay the mortgage equally.
35:46
And right now we earn fairly equally too.
35:50
My first worry, if we ever separated, I'm not sure how much of the house sale I would actually receive.
35:56
Yeah.
35:57
Second, we'd like to get married and have children, but before any of that, my boyfriend wants a prenup to protect his inheritance.
36:03
I respect that, but I do think that that should change once children are in the picture.
36:07
Even maternity leave alone would hit my pension and earning potential hugely, and his income is already projected to double mine regardless.
36:17
I mean, God, these are all so similar, aren't they?
36:19
It's like really crazy when you start to...
36:36
you know, you think someone's situation is really unique, but actually it is.
36:39
It's kind of having kids and getting married just changes the game so dramatically.
36:44
And even like I just picked up on what she said there, like protecting his inheritance and income.
36:48
And it's like, why?
36:49
Maybe it doesn't need to be that.
36:50
Why?
36:51
Yeah.
36:51
And I think that's, and she's obviously already, I think, you know, she's doing the right thing.
36:56
She's thinking about going, okay, if we're going to have kids, what does this look like?
36:59
And,
36:59
That's what she needs to articulate in that conversation to say, okay, well, maybe if I'm not impacting my career, then I shouldn't, you know, maybe it's like, okay, well, I'm okay.
37:08
And I think she did say that she's okay with him having it as inheritance.
37:11
But they do go down that children path and are fortunate enough to have children.
37:14
She, you know, she can hopefully now.
37:17
because she's aware and having these conversations to say, yes, I'm okay with a prenup, but it needs to have a provision in there.
37:24
So we call them like trigger dates where it's like an event happens.
37:27
So if you do have a child at that point, it might be okay.
37:30
Well, it could be even just that the inheritance is ring-fenced and then because they are going 50-50, any equity above that could be split 50-50 and going, okay, maybe our income and our savings is...
37:46
Maybe separate, but up until the point we have children, and if we have a child, then actually we might go either value moving forward, or we might go actually no scratch there.
37:54
If we are committing to having children, it is now savings and everything comes into the pot, but it might be that the inheritance is still just protected.
38:01
So you can, I think that's the hard thing is it's so complicated.
38:05
like person specific like it's so hard to sit here and tell someone like here you know here's an option like it is really sitting down with two people and going okay what is your position but also being aware your position can change well I was even thinking you know if you went into the idea of having kids where you said I don't want my earning capacity to change I want to remain working and I want this to be really equally split in terms of financially labor etc
38:31
So what that means is together we need to find a way to have a nanny from nine to five.
38:35
We need to – or whatever that looks like.
38:37
The cleaning, all those other little things.
38:39
Oh, totally.
38:40
But I'm thinking more in terms of the actual earning capacity piece.
38:42
It's like if you decide to stay working, an office job, whatever your job is, in your business, whatever, if your earning capacity kind of isn't impacted because you've structured the way that you're raising the child in a really equal way –
39:00
and you're both still earning and then able to contribute to your pensions, like, I don't know, maybe there is a way that it can be separate while having kids.
39:07
If you are thinking about the kid as very shared and equal responsibility and time-wise so that both your careers are impacted equally.
39:15
I don't know.
39:15
Maybe it's like...
39:17
And in that position, you might just say, well, neither of us have taken a hit.
39:22
Like, neither of us have actually sacrificed or missed out.
39:26
But then again, you say that, I guess if you've got a nanny and things like that, it's like, oh, you know, somebody's off sick at school.
39:31
Like, who's doing that?
39:32
Yes, exactly.
39:32
But if you are doing that equally, it might be like, well, neither of us are being impacted and we are okay with what the position is.
39:40
Oh God, it's just like, I just feel like so, um, it's such a hairy, tricky subject.
39:47
I think it's just because we haven't normalized it.
39:49
I don't know.
39:49
I don't know.
39:50
Do you think it's being, feeling like you're being judged on your finances and?
39:54
No, nothing to that.
39:56
I'm the most like annoyingly transparent person in the world.
39:58
I don't care about, you know, not that at all.
40:02
I think it's more, I don't know, you're making an investment in a person.
40:06
Yeah.
40:06
You know, if you're committing to have kids in a relationship with someone, that is a financial investment, you know, like, which you're making a lot of decisions or an investment without a huge amount of knowledge.
40:17
You know, it's risky regardless.
40:18
Yeah.
40:19
You could have an amazing partner who has high earning capacity, who has lots of assets.
40:22
Like, you can never protect yourself or make – you should always make a decision on who you're with based on the person that they are.
40:28
So I'm not trying to make it all about business and money, but it is just really interesting to think like in any other situation where you're going into you, it's crazy to think that you wouldn't talk about these things, you know, like if you zoom out and think, yeah, it's just, it's wild.
40:45
But then I am also a hundred percent on board with like understanding why it's so complex and awkward and it feels icky and it feels really, um, unromantic.
40:53
Yeah.
40:54
Yeah.
40:55
We need to change that.
40:56
Yeah, I think, and that's where I do think it's just probably that whole society and our perception.
41:01
Like, we've been kind of, I feel like, a society to be...
41:05
brought up, you know, I think it's definitely changing now, but money is icky.
41:09
And it's icky to talk about finances and spending and things like that, where it's like, if we normalise that, and also not just money and recognising the unpaid labour and the sacrifices and, you know, who's doing, like, if it isn't always equal, like, who's doing all the washing and the cooking and the cleaning, the kids pick up and the sick days and the
41:27
Even just life, without children, there's still so many things where somebody could be picking out more of a load.
41:33
But it's also going, are we doing it?
41:35
This is my side, that's your side.
41:37
So we're okay with that.
41:38
It's not one person doing way more than the other.
41:41
Also, maybe there needs to be money therapy or something.
41:44
I mean, in the same way that you get over a relationship, by processing it and talking through it and letting go and then dating again.
41:50
It's like...
41:51
you know you you there there must be a level of like processor because it's emotional and you don't want to be like bitter and annoyed and like and it's fair enough to feel those feelings but like don't let them define you and stay in your life and like in your body forever or it is just going to be this like yeah it's yeah there's so much that goes wrong yeah life but if you don't deal with that and you just bury it into a
42:15
like box and put it around the corner you the way you interact with relationships or with money or with your investments will always be tainted by this like bad experience i mean it's business and you know the emotional therapizing of people and money because it is so i think it would be a huge business i think i've done that for six years yeah
42:37
Holly, thank you so much for coming on again.
42:39
It was so fun to do this in person.
42:41
And yeah, I just think that having these conversations about the blunders and the things that have gone badly is really important.
42:49
But also talking about the amazing wins that you can make in property and investing and actually putting contracts in place is really just future proofing so that you don't need financial therapy.
42:59
um but yeah thank you so much you're amazing and like so great on the podcast it feels like you already have like just so much experience even though yeah yeah no it's so great um and for anyone that wants to find you and the work that you do where can they find that
43:17
uh succession.nz on instagram tiktok and all the things yay okay amazing thank you so much holly thank you for having me thanks so much for listening to another episode of the property podcast if you've got something out of this one hit follow wherever you're listening so you never miss a future episode and if this one's got you thinking okay but what do i actually do now that is completely normal most people go back and forth for a while before they take the next step to buy something
43:42
But you don't have to figure it out alone either.
43:44
And that's the best bit.
43:45
BNZ have home loan partners who do this every day and can support you through every stage of the home buying journey.
43:51
You can book in for a chat.
43:52
There's no pressure.
43:53
You can just talk it through.
43:54
And sometimes one conversation is what actually turns thinking about it into actually doing something.
43:59
We're so thankful to BNZ for helping empower this property podcast so that people like you can feel a bit more confident in taking their next step.
44:07
Okay, quickly, the Curve was created to empower and educate you about investing, but we are not financial advisors.
44:13
Our platform exists for educational purposes only, and it doesn't provide personalized investing advice for your individual needs and should not be relied upon to make an investment or financial decision.
44:22
And always remember to do your own research before making any investment or financial decision.
44:27
We're here for any knowledge and support you need, but the final call is always yours.
44:31
And thanks for being here.
44:32
You got this.
44:33
Yeah, we know you got this.