Separating: Who gets the ring?

One of the questions I am often asked early in a separation is a simple one: who gets the ring?

It might seem like a small issue compared to houses, bank accounts and KiwiSaver, but it is actually a very good way to understand how relationship property law works. The answer usually surprises people, and it highlights an important distinction between relationship property and separate property.

When a couple separates, everything they own and everything they owe is sorted into one of those two categories. Relationship property is generally divided equally. Separate property is usually retained by the person who owns it. That sounds straightforward, but the difficulty is working out which category something falls into.

An engagement ring is usually treated as a gift from one partner to the other. Because it is a personal gift, intended to be used and enjoyed by one person only, it will usually be classified as separate property. That means the person who received the ring will keep it, even if the other person paid a significant amount for it. The ring does not form part of the pool of assets to be divided between the parties.

That result can feel counterintuitive, particularly where the relationship has been long and most other things are being shared equally. However, it reflects a broader principle that not everything acquired during a relationship is treated the same way.

The issue becomes even more difficult when there is debt involved. It is quite common for a ring to be purchased using a credit card or a personal loan. In most cases, that debt will remain the responsibility of the person who incurred it. The reason for this is that relationship debts are generally those taken on for the benefit of both parties, or to acquire or maintain relationship property. Because the ring is separate property, the borrowing used to purchase it is usually treated as separate as well.

This means it is entirely possible for one person to leave the relationship with the ring, and the other to leave with the debt that was used to buy it. That outcome often feels unfair, but it is consistent with how the law applies the distinction between separate and relationship property.

Stepping back from the ring itself, this is part of a wider framework that applies to all assets and liabilities. Relationship property will usually include the things that have been built up together over the course of the relationship. That commonly includes the family home, household contents, income earned during the relationship, and savings or investments accumulated while the parties were together. These are the assets that are generally divided equally, regardless of who earned or paid for them.

Separate property, on the other hand, usually includes things that are more personal or that sit outside the shared financial life of the relationship. Property owned before the relationship began will often remain separate, provided it has not been turned into a shared asset. Personal gifts, like jewellery, are usually separate for the same reason. They are given for one person’s benefit, not for the relationship as a whole.

Inheritance is another common example of separate property. If you receive an inheritance during a relationship, it will usually remain yours. Your partner does not automatically have a claim to it. However, this only applies if the inheritance is kept separate. If it is mixed in with relationship property, the position can change quite quickly.

A common example is where an inheritance is used to reduce the mortgage on the family home. Once that happens, the inheritance is no longer sitting separately. It has been applied for the benefit of both parties, and it can lose its separate character. In that situation, it may be treated as relationship property and shared on separation.

The same principle applies more broadly. The way an asset or liability is used, and the intention behind it, can be just as important as where it came from. Separate property can become relationship property over time if it is intermingled or used in a way that benefits both parties. Likewise, debts can shift in character depending on why they were incurred and how they were treated during the relationship.

The key point is that the classification of an asset will often drive the classification of the corresponding liability. If something is relationship property, the associated debt is more likely to be shared. If something is separate property, the debt is more likely to sit with the person who took it on.

Coming back to the ring, it is a small but clear example of how this framework operates in practice. It shows that not everything purchased during a relationship is automatically shared, and it highlights the importance of understanding how assets and liabilities are classified.

For many people, this is one of the first times they realise that the law does not always align with what feels fair or intuitive. That is why it is important to get advice early, particularly where there are higher value assets, inheritances, or debts involved. Small decisions made during a relationship, such as how money is used or where it is held, can have a significant impact if the relationship later comes to an end.