Saying 'I do' to a prenup

April 18, 2020

For most, the thought of a prenup rings more alarm bells than wedding bells.  However – even though it’s something most soon-to-be-weds don’t want to consider – the prenup (also known as a contracting out agreement) can be an important step. The average age of marriage is increasing, meaning people have more time to make money, build assets and receive substantial gifts before they enter a relationship. While asking your partner to sign a contract outlining what will happen to your assets if you split or die is hardly romantic, it could actually be something worth considering (or at least diving a little deeper into).

What is a Contracting Out Agreement?

A contract seems a little formal, doesn’t it?

Relationship property law in New Zealand generally presumes that partners contribute equally (albeit in different ways) to relationships. The law therefore contains mechanisms to create a ‘fair’ division of assets if a relationship ends, due to separation or death.  A contracting out agreement (“CoA”) is an agreement made by a couple to contract out of the general law, to record on their own terms what will happen to their assets and liabilities should their relationship end (Sorry – we did warn you about the lack of romance). Generally, a CoA will record which assets/liabilities are classified as separate property or relationship property.

Aside from classifying assets that you have worked hard to buy (and therefore protecting the financial independence that you’ve been growing outside of your relationship), a CoA can also deal with assets that you may have inherited or been gifted by a family member, addresses any separate debt that you or your partner have and can help to avoid costly disputes if the unimaginable happens and your relationship does end.

Entering a CoA doesn’t mean that you are planning a separation or that you don’t trust your partner.  It’s simply a tool to ensure that you create a workable outcome (with as little hassle as possible) should the worst case scenario occur.

And, like everything, relationships can come in all shapes, sizes and forms. The law gets this (it’s very understanding) and it can be tailored to suit your particular circumstances via a CoA.


When to have the conversation...

Be mindful of your timing  

If you’re in the middle of wine-tastings, seating plan strategies, or your third budget adjustment (upwards, obviously), we suggest you steer clear of the chat. Choose a time that isn’t fraught with emotion, stress (or copious amounts of alcohol), so that you can enter the conversation calmly.

In any case, the earlier the better.  Just like getting that minor filling, it’s easier to catch it early (when the idea of separation seems ludicrous) than wait until the toothache passes the point of no return.  And hey…if your partner spits the dummy or runs a mile, better to know now, right?

How to have the conversation...

Worried about looking greedy, tight or unsupportive?  

If you’re finding it hard to even bring the ‘nup up, start by telling your partner about an interesting blog you were reading today…

We also suggest you:

Explain your reasons.  Let your partner know why you want to enter a CoA.  Aside from protecting assets you’ve acquired yourself (or that have been in the family for generations), maybe this ain’t your first rodeo and you’ve already had a messy separation, or perhaps your parents went through a crushing post-separation battle.  Retelling horror stories (where appropriate) never hurt anyone.

Lead with transparency and honesty.  This will help to assure your partner that your request for a CoA isn’t a personal attack on them, and that you are simply being responsible for your assets.

Milk it.  Use the conversation to talk about other important aspects of your future together, for example; career aspirations and expectations, having a family or combined financial goals.  It can also be a good excuse to talk about concerns you may have if you do split (who will look after Baxter the Spoodle??). Chances are you’ll both feel more aware and secure once you’ve started to talk about it.  


Seeing a lawyer

If you would like to explore whether a CoA is necessary or if you are ready to put one in place, you need to contact a relationship property lawyer.  They’ll provide you with tailored advice on what you're looking to achieve and how the law applies to your circumstances.  Ask as many questions as you can so that you're fully aware of your situation and how a CoA will work if it’s required.  

We’ll be honest, it can be a tough process. Expect possible probing questions, conflicting emotions and potential confusion around the hows, the whats and the whys. It will require a lot of back and forth and a large amount of correspondence, reading and thought.


It is worth remembering that CoA’s can be updated as circumstances change and you should regularly review your CoA so that it evolves with your relationship and finances.  


Taking the leap

What is there to lose?  Potentially a lot! While it may seem like you can’t even agree on what to order from Uber Eats (never easy, especially on a Sunday night), coming up with a ‘worst case plan’ while you’re on the best terms will be much easier (and so much cheaper).  Get the worst admin job out of the way now so you and your partner can sit back, gaze into each other’s eyes, and dream about the adventure you (and your lovely assets) are about to embark on together.

* This is not legal advice and a practising lawyer should be consulted should you wish to pursue a contractual agreement.

For help with the fun stuff, head over to our Curator wedding planner web application.