Need assistance with your Contracting Out Agreement?

Frequently asked questions

• Does the Property (Relationships) Act 1976 apply to me?

  If you are married, in a civil union or have been in a de facto relationship for three or more years the Act does apply to you and it will determine how your property would be divided if you separate. There are some instances where a de facto relationship of fewer than three years is also captured by the Act.

• How does the Act work?

  The Act determines if the property is separate or relationship property. It then outlines the ways in which relationship property is divided. By contracting out of the Act, you are able to set your own rules for the division of relationship property.

• When should I get a Contracting Out Agreement?

  In general, you should get a Contracting Out Agreement before you have been in a de facto relationship for three years, before you marry or before you enter a civil union. If you are moving into a home owned by one partner or buying a property with your partner and contributing unequal amounts this would be another trigger as to when to do a Contracting Out Agreement.

• What is the process for getting a Contracting Out Agreement?

  We would meet with you, discuss your relationship circumstances and what you are trying to achieve. We would talk you through the different types of Contracting Out Agreements - each of which allows for different degrees of property sharing depending on your wishes and the stage of your life and relationship - and proceed to draft this agreement for you. Your partner will then need to seek independent legal advice on the draft agreement before it is signed by both of you and your lawyers.

• How long does the Contracting Out Agreement process last?

  Depending on the complexity of your property, the time from first meeting to completing an agreement varies. In straight-forward matters, we are able to complete the process within a couple of weeks.

• What can you contract out of?

  You can contract out of how the Act classifies property (ie. either separate or relationship property) and you can contract out of how the Act divides the property in the event you separated or on the death of one of you.

• Do Contracting Out Agreements only apply on separation?

  No, you can also have a Contracting Out Agreement to determine the division of your property in the event of one of you passing. You can have different rules that apply to the division of property if you separate or if the relationship ends by the way of death of one of you.

• We are buying a home together, should I get a Contracting Out Agreement?

  If you and your partner are contributing different amounts towards the purchase of a home, or receiving loans/gifts from parents that you want to protect, you'll need a contracting out agreement to protect those contributions. When you're buying a home, it's important to always get relationship property advice.

• What assets are “relationship property?”

  The home you live in and all chattels within it, your income, KiwiSaver, vehicles and anything else you acquire during the relationship is all relationship property. The Act is broad so it is important to contract out of the Act if you want to keep some of your assets as your own.

• What about my Trust?

  In recent years, “trust-busting” has occurred in some of the case law surrounding relationship property and the Law Commission has recently recommended legal reform to further allow this. In light of this, the best way to protect your assets is through a Contracting Out Agreement which can sit alongside a trust. Your Trust deed can also be reviewed in order to ensure it is up to date and provides the best protection available.