What is a Prenup?
This question is frequently asked by couples, wondering whether they should get a prenup agreement. Depending on your situation, we think this is a good idea.
Recently this was the topic of a NZ Herald article, showing more and more couples consider this normal.
First of all, a prenup enables partners to ‘contract out’ of the equal sharing of relationship property under the Act.
The broad definition of what makes up ‘relationship property’ means you could be sharing your assets with your long-term partner.
Assets which you have brought solely could be relationship property. This is might be a house which only you owned before the relationship started.
This could put your financial situation in jeopardy. That is, assuming you do not intend to share your assets with your partner. No doubt if you want to keep your assets which you brought into the relationship separate, you should get a ‘prenup’.
When should you get a prenup?
The Property (Relationships) Act 1976 applies once the parties have been in a qualifying relationship.
These are usually a marriage, a civil union or de facto partnership for 3 years. A qualifying relationship under the Act has its own definition.
Factors for a qualifying relationship might include:
- How long you have been in relationship;
- How financially dependent you may be on each other;
- The ownership and use of shared property;
- The degree of mutual commitment to a shared life or
- The reputation and public nature of the relationship.
These factors are only examples.
Am I in a “de facto relationship”?
The Act almost definitely applies if a couple have been living together for 3 years. But it might not be necessary to have lived together for this long or to have shared finances to be deemed a couple.
Most noteworthy, in the case of Scragg v Scott  NZFLR 1076, the parties only lived together for short periods of time because of Mr. Scragg’s overseas work.
Therefore no continuous joint living period occurred of more than nine months. The Judge described their living arrangement as a de facto relationship under the Act.
This was on a broader consideration of the nature of a relationship contained under section 2D of Act. The Judge considered the mental aspect described as “a commitment to a continuing future relationship.”
What if you live separate from your partner?
If you live in separate houses and don’t share finances you might still be in a “de facto relationship”.
Similarly, the High Court in Moon v Public Trust and Anor  NZHC 1169 expanded the scope of the definition of “de facto relationship”.
Although the parties had lived in their own separate homes, it was still considered a de facto relationship.
In addition, the couple shared few common household possessions for the entire 27 years of their relationship. But Justice Powell did not view the lack of common physical assets as going against a relationship.
Instead, the deceased’s health, and the plaintiff’s home-based business made it unreasonable to expect shared living arrangements.
When should you get a prenup agreement if you are in a de facto relationship?
Certainly, CODR recommends getting a prenup agreement within the first 3 years of the relationship.
The longer you leave it, the greater the risk, the harder the conversation – and the more expensive it could eventually be.
What is the process of a prenup agreement?
First you need a prenup agreement. Prenup Agreements sets out who owns which asset(s). To prepare, you might like to read about what you should consider on separating.
You and your partner will then need to go to independent lawyers. This is called the “certification process”.
During the certification the lawyer will discuss the agreement’s consequences for you personally.
You might be entitled to more under the Act. This will be discussed once your situation is fully understood.
Ready to get a prenup agreement?
You can purchase this here for $172.50.
Certifying the prenup agreement makes it legally binding. Therefore, don’t skip this step. It could cost you a bit upfront now. But if you don’t, it could end up costing more down the track.
CODR understands this can be a barrier for busy people.
For the reason that it takes time or networks to find a lawyer, CODR has a panel of family lawyers.
Our lawyers are relationship property experts and family lawyers. We provide this service online. Due to this, we offer more affordable rates.
Ready for certification?
If you have the agreement above, and are ready to certify, please contact one of the CODR team. You can email us at email@example.com or fill in our contact form.