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Does the Property (Relationships) Act 1976 apply to me?
If you are married, in a civil union or have been in a de facto relationship for three or more years the Act applies to you and will determine how your property will be divided should your relationship end. The Act will also apply to you if you have a child together, even if you haven’t been together for 3 years.
How does the Act work?
The Act determines what is your separate property and what is your relationship property. It then provides how the relationship property is divided should your relationship end. If you did not want the Act to apply to your situation, you can contract out of the Act with a Contracting Out Agreement (Pre-Nup). This agreement sets out your own plan for how the property will be divided.
When should I get a Contracting Out Agreement?
I recommend entering into a Contracting Out Agreement before you marry, enter into a civil union, or have been in a de facto relationship for 3 years. However, if you are already passed this stage, it is never too late. It is also recommended to get a Contracting Out Agreement if you already own a home and your partner is about to move in with you, or you a buying a property together but contributing unequally.
What is the process for getting a Contracting Out Agreement?
I can offer the entire process online but if you prefer to meet face to face, that works for me too. The steps involve discovering, deciding, and then doing. First, I will need to discover is the nature of your relationship and what are your assets and liabilities to discover your legal position. I will also need to discover what are your future plans.
Then, you will need to decide what you would like to keep separate, what you would like to be relationship property, and ultimately decide on your future.
Once decided, I will draft the agreement, provide you with independent legal advice and you can move forward knowing that your assets are protected.
You will discover, decide and do. Once done, you will move forward with peace of mind knowing that your assets are secure for your future.
Discover
Decide
Do
Discover your assets & liabilities
Discover your legal position
Discover your future
Decide what is separate
Decide what is together
Decide on your future
Do an Agreement
Do legal advice
Do move forward
How long does the Contracting Out Agreement process last?
Provided I have all the information I need from you and your partner, I can draft an agreement within days of you contacting me.
What can you contract out of?
You can contract out of how the Act classifies property (ie. either separate or relationship property) and you can contract out of how the Act divides the property should your relationship end.
Do Contracting Out Agreements only apply on separation?
Contracting Out Agreements can apply when your relationship ends, whether that be through separation or one of you passing away.
We are buying a home together, should I get a Contracting Out Agreement?
If you both of you are contributing equally to the purchase price and paying the home loan, rates, insurance etc then a Contracting Out Agreement may not be required, particularly if you plan to have children together. However, there may be other circumstances that make it appropriate where you own other property that you would like to keep separate.
What assets are “relationship property?”
The home you live in and all chattels within it (even if you are the sole owner and regardless of when you purchased it), your income (and anything you use your income for such as topping up the mortgage on a rental property), KiwiSaver, vehicles, property you use as part of your relationship (e.g. a beach bach) and anything else you acquire during the relationship is all relationship property including pets. The Act is broad so it is important to contract out of the Act if you want to keep some of your assets as your own.
What about my Trust?
Trusts do not fully protect property from a relationship property claim, particularly the family home, regardless of when it was purchased or that it is owned by a Trust.
Do I need a Pre-Nup?
Discover if a Contracting Out Agreement (Pre-Nup) is right for you
Hayley Boud
Your Caring Relationship Property Lawyer, specialist in Contracting Out Agreements (Pre-Nups)
