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A Contracting Out Agreement is an agreement between two people in a relationship to contract out of the provisions in the Property (Relationships) Act. If you don’t have a Pre-nup, then the Act will apply should your relationship end (through separation or one of you passing away). That means equal division of relationship property which includes the family home, whenever it is acquired.
The family home is where you and your partner live together. If your relationship end after 3 years of you both living in your home, then the equity in your home is divided equally regardless of when it was bought. It doesn’t matter that you bought the house 30 years ago and it’s now mortgage free.
Relationship property also includes family chattels such as household furniture, household appliances, tools, motor vehicles, caravans, trailers, or boats purchased during your relationship. Relationship property can also include your beach bach. It even includes household pets.
Relationship property also includes your income and therefore your savings and anything you use your income for such as topping up the mortgage repayments on a rental property, KiwiSaver or other superannuation scheme entitlements. Should your relationship end, anything that your income went towards will be considered relationship and divided equally.
The only way to avoid all your assets bring divided equally should your relationship end after 3 years is to contact out of the Property (Relationships) Act by entering into a Contracting Out Agreement (Pre-nup).
Feel free to contact me, Hayley Boud on 021 077 7785 for a free 15 minute phone call.
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Discover if a Contracting Out Agreement (Pre-Nup) is right for you
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Hayley Boud
Your Caring Relationship Property Lawyer, specialist in Contracting Out Agreements (Pre-Nups)
