Couples are increasingly signing prenuptial agreements, whether they are getting married or are in long term de facto relationships. Also known as contracting out agreements, prenuptial agreements should be seriously considered by any couple who want a practical solution for potential issues that can arise in relationships with shared property or finances.
In New Zealand, prenuptial agreements can be arranged before or during a marriage, civil union or de facto relationship. While some people think getting one means you’re operating under the assumption the relationship will fail, it can be of real assistance by clarifying any uncertainties and discussing issues honestly from the start.
What Does A Prenuptial Agreement Cover?
In the event of separation or death, the Property (Relationships) Act 1976 will apply to the division of property. Under the Act, property classified as relationship property will generally be split equally between the parties. Section 21 of the Act states that spouses or partners contract out of the Act by making their own private agreement as to the division of their property.
This agreement covers what will happen in the event of a dissolution or separation regarding assets. Some of the things the agreement covers may include:
- Real estate
- Obligations to finalise debts and liabilities
Due to the evolving nature of relationships, it’s essential that all future scenarios such as having children and future asset purchases are considered. Ensure you fully disclose all your assets and liabilities even if they are only of sentimental value. Not disclosing all your assets and liabilities runs the risk of having the agreement set aside. For prenuptial agreements to be legally binding they must be in writing and signed by both parties once they have received independent legal advice.
Benefits of a Prenuptial Agreement?
Getting a prenuptial or property relationship agreement isn’t about trying to get more than the other person when it comes to property separation in a divorce. It’s about handling a variety of sensitive, complex and legal matters such as:
- Guaranteeing financial security for children from a previous relationship
- Protecting individuals in the relationship from each other’s debt
- Dealing with a property that might not be split easily
- Protecting a family heirloom or substantial inheritance
- Reducing conflict if your relationship does end
- Can help prove intention if there is a dispute over a will
- Protecting significant assets owned before the relationship
- Creating lifetime certainty for your relationship
A prenuptial agreement is like a will and needs to be updated regularly as your circumstances change, for example, when you have children.
Contact Our Relationship Property Law Solicitors Today
If you need help managing your property and other assets at the beginning, during or at the end of a relationship, consult the experts at Carlile Dowling. Our team has provided trusted legal advice for more than 130 years regarding relationship property as well as family law, immigration, employment law, commercial property law and more.
Get in touch today by calling 06 927 8150 or contact us online.