A “pre-nup” is the shortened name of a “pre-nuptial agreement”. This phrase is commonly used to describe agreements that partners may enter into allowing them to decide how their relationship property will be divided in the event of separation.

In New Zealand, pre-nups are also commonly called “contracting out agreements”.

Contracting out agreements can be entered into at any stage during a relationship, but usually before it becomes one of long duration (generally over three years).

Since the effect of a contracting out agreement is that property is no longer divided equally, there are strict requirements for it to be valid. These are:

  • The agreement must be in writing and signed by both parties;
  • Each party to the agreement must have independent legal advice before signing the agreement;
  • The signature of each party to the agreement must be witnessed by the lawyer who gave that party the required advice; and
  • The lawyer who witnesses the signature of a party must certify that, before that party signed the agreement, the lawyer explained to that party the effect and implications of the agreement.

During the process of putting in place a contracting out agreement, the parties will also go through a process called disclosure, where both sides provide evidence of all of their assets and liabilities, so that full independent legal advice can be provided to each of them about the effects of an agreement.

It is important to understand that in New Zealand a valid and enforceable contracting out agreement cannot be entered into without an independent lawyer giving advice as to the effects and implications of the agreement to each party before it is signed.

In some situations, where assets have not been disclosed when a contracting out agreements has been entered into, if the requirements listed above have not been complied with, or situations have drastically changed, a Court may decide to set aside a contracting out agreement. The threshold for a Court to do this is high, and the agreement must be “seriously unjust” in the circumstances.

Contracting out agreements are entered into for many reasons including where one person brings more assets into a relationship, parties want to protect an inheritance or gifts, or there is simply a desire for certainty in the event of a separation.

If you and your partner are considering entering into a contracting out agreement, you must each receive independent legal advice, as detailed above, so it is wise to speak with a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-priced Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

 


Gender Equality
Super Gold Card

If you are a New Zealand Super Gold Card Holder (Australian Senior Cards do not qualify) we will give you a 75% discount of the fee for one of our set fee 1 hour initial consultations. We will also give you a 17.5% discount off the first matter we handle for you and then 12.5% off any subsequent matters for you.  These discounts relate to your personal matters only (i.e. not business or organisational matters).

To receive the discount please let us know if you are a New Zealand Super Gold Card Holder.