While legal matters may be the last thing on your mind when planning a wedding, it’s important to take a moment to think about how your assets will be protected.
Before tying the knot, it’s worth considering a pre-nuptial (contracting out) agreement. It’s also vital to know that in most cases your existing Will becomes invalid when you get married. Protecting your assets now can save time, stress, and uncertainty later.
Planning to marry or entering a new relationship? A pre-nuptial agreement may be right for you.
As you plan your future together, it may be beneficial to consider what happens to your property if your circumstances were to change. While no one enjoys having that conversation, addressing issues early lets you decide as a couple what will be right for you, rather than the law dictating how your relationship property will be shared if you split.
In New Zealand the Property (Relationships) Act 1976 governs the division of property after separation or on death. Without a prenup, the presumption of equal sharing usually applies meaning your assets and liabilities are split 50/50 on separation*. This includes your family home, household chattels, relationship debt and other relationship property.
Section 21 of the Act allows couples to “contract out” of these rules by entering into a contracting out agreement, otherwise known as a “prenup”. The key benefits of a prenup include keeping finances transparent, protecting businesses, preventing disputes if the relationship comes to end, safeguarding inheritances and keeping pre-relationship assets separate.
Contracting out agreements must meet strict requirements under the Act. Informal agreements without proper legal advice will not be legally enforceable – there are no shortcuts.
If you have a business, inheritance, or significant personal assets you may want to have an initial conversation with a lawyer about what is considered relationship property – even if you’re not ready to enter into a prenup just yet.
Newly married? Make sure your Will complies with New Zealand Law
Under New Zealand Law your Will is generally void once you get married or enter into a civil union, unless it was made in contemplation of that marriage or civil union. This is something to consider if you are signing a Will before marriage and anticipate marrying your current partner.
If you have recently married or have entered into a civil union without updating your Will we recommend speaking with a lawyer to confirm whether your Will is still valid.
If a Will is invalid, intestacy applies meaning the law, not you, will decide what happens to your estate. Under the Administration Act 1969, your estate would be dealt with according to a strict legal formula, which can be significantly different to your wishes.
If you are contemplating marriage or are newly married, a professionally drafted Will provides peace of mind that your treasured items and assets will be distributed as intended, the people you care about are protected and your funeral arrangements are followed.
*The presumption of equal sharing generally applies to marriages, civil unions and de-facto relationships of three years or more, taking into account the circumstances of the relationship.
How can we help?
WRMK Lawyers has a highly experienced, specialist relationship property team who is happy to discuss what is right for you and assist with getting a pre-nuptial agreement in place, and experienced local life planning lawyers who can assist with updating your Will.
RELATED PEOPLE
