Contracting Out Agreement Lawyers In Auckland

A contracting out agreement, otherwise known as prenuptial agreement or ‘prenup’, allows couples to contract out of the equal sharing rules of the Property (Relationships) Act 1976 (Act). 

If you are living with your partner, married, or in a civil union, you should seriously think about completing a contracting out agreement.

A contracting out agreement can protect your assets from the equal sharing rules under the Act, provide certainty about what will happen if you separate, and avoid disputes from arising about your relationship property.  

Having a contracting out agreement can significantly reduce the likelihood of a difficult separation or divorce in the future.

If you do not have a contracting out agreement when you separate and the Act applies, you may need to negotiate and agree a settlement with your ex-partner to separate.

This can be stressful to deal with during an emotional break-up.  Disputes can arise quickly, which can take weeks or months to resolve.

If a court application is required to resolve disputes and order the division of relationship property, the separation process can take years to complete.

Evolution Lawyers specialise in preparing and executing contracting out agreements. We can help you put a prenuptial agreement in place.

What Is A Contracting Out (Prenuptial) Agreement?

A contracting out agreement is a special contract. It enables the parties to contract out of the equal sharing rules of the Act and make their own agreement about how their property will be dealt with if they separate or divorce.

As a contracting out agreement is not an ordinary contract, the Act requires independent lawyers to sign and witness the contracting out agreement before it is valid and enforceable.

In a contracting out agreement, you can agree what assets are “relationship property” to be shared equally with your partner and specify what assets are to be treated as “separate property” if the relationship ends.

Separate property is property that is not shared or divided during a separation or divorce. The following are common examples of separate property included in contracting out agreements:

• A house or investment properties purchased before the relationship.
• Kiwisaver funds.
• Shares in a company or interests in a business.
• Boats and vehicles.
• Investments and savings in bank accounts.
• Interests in family trusts and future inheritance.

Is The Cost of a Contracting Out Agreement Worth it?

Yes. While lawyers are not cheap, the cost to complete a contracting out agreement is a worthwhile investment.

A contracting out agreement can protect your assets from the equal sharing rules under the Act, provide certainty about what will happen if you separate, and avoid disputes from arising about your property. 

Having a contracting out agreement can also significantly reduce the likelihood and cost of a difficult separation or divorce in the future. 

We are happy to provide you with a cost estimate to prepare a contracting out agreement. Please contact us.

Can I Make A Valid Contracting Out Agreement Without A Lawyer?

No. A lawyer is required to make a valid contracting out agreement. A lawyer must explain the implications and effects of the contracting out agreement and certify that the agreement complies with the requirements of s 21F of the Act.

If you do not involve lawyers in the contracting out process, your agreement will be void. It will not be legally binding, even if has been signed by both parties.

Can I Make A Contracting Out Agreement Before The Act Applies?

Yes. The best time to complete a contracting out agreement is at the start of your relationship, marriage, or civil union.  The contracting out process is usually straight-forward early on in a relationship and both parties usually work together to agree terms in a timely manner.

Can I Make A ‘Prenup’ If I Am Already Married Or In A Civil Union?

Yes. You can make a ‘prenup’ or contracting out agreement if you are already married or in a civil union.  This agreement is sometimes called a post-nuptial agreement.

Can The Contracting Out Agreement Cover Matters Relating To Our Children?

Yes. You can include terms in your contracting out agreement to deal with parenting through separation. 

While child custody and child support are matters that are outside of the Act, the parties can record their intentions in a contracting out agreement to provide guidance during the separation process.

We recommend speaking with a lawyer if you would like to include childcare terms in a contracting out agreement. This is something we can help you with.

Can I Draft My Own Contracting Out Agreement?

While it is possible, we do not recommend drafting your own contracting out agreement. 

The Act is comprehensive and there are several legal terms that a lawyer will want to see in the agreement before they are willing to certify, explain, and witness the document.

Often it will cost more for a lawyer to review and amend a document that has been prepared by a non-lawyer. Contracting out of the Act is complicated process, which is why the Act requires a lawyer to be involved.

We recommend speaking with a lawyer if you are thinking about drafting your own contracting out agreement. This is also something we can advise you on.

Are Contracting Out Agreements Just For Wealthy People?

No. Contracting out agreements are not just for wealthy individuals. If you have a Kiwisaver fund, own a home or are expecting family inheritance, you already have assets worth protecting.

Can a Court Set Aside (Throw Out) a Contracting Out Agreement?

A court will not set-aside a valid contracting out agreement unless it is satisfied that giving effect to the agreement would cause serious injustice.  This is a high threshold. Examples of situations that might result in an agreement being set-aside are:

• There was undue influence or duress when the parties entered into the agreement.
• One party concealed assets or actively misled the other about the extent of their assets.
• The circumstances have changed dramatically since entering the agreement. The terms of the agreement are now unreasonable and will cause serious injustice.

We Can Help You With All Matters Regarding Contracting Out Agreements

Our Auckland family lawyers are experts in all areas relating to contracting out agreements. If you live with your partner, are married or in a civil union, or thinking about ‘tying the knot’, speak with us about completing a contracting out agreement.