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In this post, I answer the tough questions raised from Kelly Clarkson’s divorce so you can avoid the mistakes made by others and ensure you have the certainty and peace of mind that comes with an iron-clad pre-nup.

IF THE RELATIONSHIP ENDS, DO I HAVE TO DO SOMETHING TO ACTIVATE THE PRENUP?

No, the prenup is binding and you don’t have to do anything to activate it.  I do, however, recommend getting a separation agreement to ensure that the division of the assets in accordance with the prenup is full and final so you can have peace of mind that the matter is final, it’s been dealt with and you can move on.

WILL I HAVE TO GO TO COURT TO ENFORCE THE AGREEMENT?

Most of the time you won’t have to go to court to have the pre-nup enforced.  Usually, when couples separate, the prenup is followed without the need to go to court.  This is the benefit of having a pre-nup, avoiding going to court if the relationship does end.  The pre-nup should clearly set out how the assets are divided at separation or death which makes it easy for everyone involved.  Here’s a document stating what we agreed to, now we just have to follow it.  Easy.

However, if the pre-nup is poorly drafted and there is some confusion in the agreement and one partner thinks it means one thing and another partner thinks it means something else, then there could be problems, especially if you are not able to agree on the interpretation.  Then, you may have to go to court to have a judge decide.  That’s why it’s really important to have a well drafted prenup, to avoid any problems later.  I do from time to time have clients bring me a pre-nup that they have drafted themselves and they have done a pretty good job but there are many things that you won’t think of unless you have been doing it for years like I have.  Some will also like to use family members who are lawyers but don’t specialise in relationship property law.  That’s not recommended either.  It’s really important to have a document that you know you can rely on should the relationship end.  It’s best to see a specialist in that area of law.

You may have to go to court to enforce the pre-nup if your partner refuses to uphold it.  If that happens you can seek an order from the family court to enforce the pre-nup.  There is even opportunity for the court registrar to sign documents to give effect to the pre-nup where the partner refuses to sign such documents.  e.g. if the pre-nup states that all the company shares will belong to  you should you separate but the partner refuses to sign the share transfer, the court can order that a registrar can sign the transfer instead.

CAN A PRENUP BE OVERTURNED?

Yes, but only if the court is satisfied that giving effect to the prenup would cause SERIOUS INJUSTICE.  When deciding if the pre-nup would cause serious injustice, the court must have regard to:

1. The provisions of the prenup.  If it is grossly unfair it will be overturned. For example, if one of the parties had already contributed a lot to the relationship property assets before the agreement was signed and then was left with nothing upon separating, that would be considered grossly unfair.
2. The length of time since the pre-nup was made.  Usually the longer that you have relied on it, the less likely it will be overturned.
3. Have the circumstances changed since making the pre-nup and whether or not those changes were forseen by the partners.  For example, if you have children since the pre-nup was signed and you have been taking care of them for the past 10 years sacrificing your career while your partner’s career has taken off, it would be unfair if the pre-nup said that everything you earn and purchase during your relationship is your separate property.  Your partner could have thousands in savings and all the household chattels and all the money he has put into the mortgage while you could be left with nothing.  That would be grossly unfair.
4. The fact that the parties wished to achieve certainty by entering into the pre-nup. Courts can’t change the pre-nup willy nilly.  It’s a contract and people have free-will to enter into any kind of contract they like so the courts won’t overturn a pre-nup easily.   In fact, it’s really hard to get a pre-nup overturned because the parties have signed the pre-nup after getting independent advice.  The pre-nup has to be seriously unjust.

However, if the advice is inadequate, it could be held void.  That’s why its really important to ensure that both you and your partner get good advice.  To get good advice, lawyers will need full disclosure from both sides so that we can advise on the effects and implications of the prenup and how far (if any) it deviates from the Property (Relationships) Act.  That’s why we lawyers will ask for all the information, bank statements, KiwiSaver statements, company shares etc.  Iif not, the agreement could be void which defeats the whole point of having one.  You want certainty that the pre-nup is binding.

CAN YOU PUT CHILD CARE ARRANGEMENTS IN A PRENUP?

It’s better to keep relationship property and child care arrangements separate.  Also, it wouldn’t be binding without a court order so, in short, not recommended.

WHAT’S SPOUSAL MAINTENANCE AND SHOULD MY PRENUP INCLUDE THIS?

Spousal maintenance is to protect the spouse/partner who has inadequate means to meet their reasonable needs.  It is generally a temporary arrangement aimed at assisting one party become financially independent.  It is helpful (for example) where one of the partners has been working and continues to work with his career taking off while the other has been taking care of the children and has put their career on hold to continue to take care of the children.

If both of you are able to take care of yourselves financially then a clause stating that neither of you will claim spousal maintenance should your relationship end is recommended.  That way you both know from the outset that neither of you can bring such a claim.  You can still claim for child support just not spousal maintenance.

A pre-nup is a really good way of not only protecting your growing assets but it also provide clarity should your relationship end.  You know from the outset what will happen.  It makes life easier because it avoids the arguments and avoids your lawyers having to negotiate a separation agreement.  It saves time and money in the long run.  This give you the peace of mind to enjoy your new relationship.