Law – Pre-nuptial agreements

Once upon a time, when most people got married, had children and lived happily ever after, there was little need to consider having a pre-nuptial agreement unless, of course, you were a rich and famous movie star!

Nowadays we have kids, might or might not get married or enter into a civil union, and will probably have one or more committed long-term relationships in our lifetimes. The term “blended family”, with offspring from previous relationships living together with parents who have re-partnered and had children with their new partner, is now a common term in our everyday vernacular.

In 2001, along came the Property (Relationships) Act 1976 – a modernised version of the original Matrimonial Property Act 1976. It overhauled all the rules around which relationships qualified when dividing assets on separation. And, in recognition of the modern non-nuclear family structure, it covers all forms of relationships, including civil unions and de facto couples.

The new regime implemented a presumption that, after three years, all relationship property is to be divided equally, unless couples opt out of the Act.

Those who choose to opt out can draw up a “contracting out” agreement, which enables couples to determine their preferred financial outcomes at the end of their relationship.

Of course, the partner wanting the agreement will usually be the one who stands to lose more if the agreement is not entered into. The other partner will probably have to swallow the harsh reality that the commitment to a long-standing (hopefully permanent) relationship does not necessarily equate to sharing all of each other’s worldly goods.
While this is not an easy subject to approach, I suggest that these days most people are more willing to do so than in the past. One reason is this change in our family structures, which requires parents to balance the desire to provide their partner with a comfortable lifestyle while protecting assets for their offspring from an earlier relationship.

This is where lawyers can be useful. It is not a simple process. Nor is it a rubber-stamping exercise. The costs are put into perspective when compared with facing a complex and stressful separation process in the event that things just do not work out.

Cushla Webster, Devonport Law, Matakana
www.devonportlaw.nz