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Thoughts from relationship property specialist Amanda Donovan
When people hear the term pre-nup, they often think of celebrity divorces or worst-case scenarios. But in New Zealand, a pre-nup - formally known as a contracting out agreement under the Property (Relationships) Act 1976 - isn’t about predicting the end of a relationship. It’s about protecting what came before it.
Think of it like insurance
Just as you wouldn’t drive a car or buy a house without insurance, entering a serious relationship - especially one involving significant assets - should come with its own form of protection. A contracting out agreement is that protection. It’s not about mistrust; it’s about clarity, fairness, and peace of mind.
These agreements are increasingly common among:
- Entrepreneurs building businesses they started before the relationship.
- Blended families wanting to preserve assets for children from previous relationships.
- Couples entering second or later-in-life relationships with established wealth.
- Trust beneficiaries living in trust-owned properties.
What does a contracting out agreement do?
It allows couples - whether married, in a civil union, or in a de facto relationship - to agree on how their property will be divided if they separate. Without one, the default rules of equal sharing apply after three years of living together or marriage.
Importantly, these agreements can be made at any time - before moving in together, after marriage, or even years into a relationship. But the earlier, the better. Waiting too long can complicate things, especially if significant joint assets have been acquired.
It’s not just about the end
A well-drafted agreement can also help couples navigate property ownership during the relationship. For example, who pays what, how assets are maintained, and what happens if one partner contributes more financially.
In cases where trust-owned property is involved, a property sharing agreement may also be needed to clarify how the property will be dealt with if the relationship ends.
Why legal advice matters
These agreements must meet strict legal requirements to be enforceable. Each party must receive independent legal advice, and the agreement must be in writing and properly witnessed. Without this, the agreement may be very vulnerable to challenge - especially if it results in a serious injustice.
Final thoughts - respect
A contracting out agreement isn’t about planning for failure. It’s about respecting what each person brings into a relationship and ensuring that, if things do change, both parties are protected. It’s a practical, respectful, and increasingly normal part of modern relationships.
If you’re building a life together, make sure you’re also protecting what you’ve already built.
For more information and guidance on the best approach when negotiating contracting out agreements (prenups) contact Amanda Donovan on 09 306 0620 or @email.