When a relationship comes to an end, the divvying up of relationship property is no walk in the park. Often it can take months, if not years, for disagreements to be resolved. 

It’s an emotionally charged time, and it doesn’t help that the law in this area has some blurred lines when it comes to the division of relationship property. At present, who gets what at the end of a relationship is covered by the Property (Relationships) Act 1976, with a 50:50 split being the general rule of thumb. This general rule does not apply to all relationships. 

Thankfully, there is a way to navigate this period of turmoil and save unneeded heartache and bitterness. But it does involve a rather awkward, if not downright uncomfortable, conversation around the ‘what if’ of separation.

Section 21 of the Property (Relationships) Act gives couples the right to ‘contract out’ of the legislation governing how property should be divided following a separation. This agreement, more commonly known as a ‘prenup’, is not just for those contemplating marriage or those with wealthy families. It’s important for any couple contemplating a civil union or de facto relationship.

There are three key questions that must be answered in creating a contracting-out agreement:

1) What assets will be ‘relationship property’ and owned together either equally or in specific proportions?

2) What assets will remain the separate property of each party?

3) What assets will not be separate property because they will be used jointly?

The time to consider a contracting-out agreement is when you and your partner are contemplating buying property together. As hard as it may be to broach this topic with your partner, the earlier you do it the better, especially where children are involved or parties are making differing contributions towards property. 

Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]

T: 03 443 0900

W: www.aspiringlaw.co.nz

Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.