Millennials are weighing in on pre-nups, or contracting out, as a way to preserve assets and money in the event of a split.
More young Kiwi couples are signing “pre-nups” and many of the contracts are being prompted by the “bank of mum and dad”, lawyers say.
Signing on the dotted line before entering wedded bliss is no longer just a thing for the rich and famous – Millennials getting into their first homes with the help of their parents are opting to protect their assets before entering marriage, or even during.
Pre-nuptial agreements (and also post-nuptials, which are agreements created and signed during marriage – normally while things are still rosy) are Americanisms.The correct terminology in New Zealand is “contracting-out agreement”, used before or during a long-term relationship.
READ MORE:
* Jeremy Sutton: Is it a gift or is it a loan?
* Do our relationship property sharing laws need a radical shake-up?
* Personal finance: Prenuptials on the rise
It’s a term that essentially means opting out of the Property (Relationships) Act 1976, which states everything must be shared equally between partners during a split.
Instead, parties agree on a new split of their assets, and an arrangement to that effect is written up and signed.
Associate Shaun Collins, who works at Rainey Collins Lawyers in Wellington, said a lot more young couples were entering into contracting-out agreements, especially with the “bank of mum and dad” now the go-to for help getting into the housing market.
He had noticed an increase in interest over the last five years.
“We’re getting quite a few enquiries from parents who are providing money for children, looking at tidying up those kind of arrangements,” he said.
“It’s a combination of people cottoning on to the law” and the cost of living being at “unprecedented levels”.
Collins said there were often cases where parents were demanding an agreement drawn up in order to release money.
Sally Morris, a partner with Auckland law firm Morris Legal, agreed more young couples were wanting contracting-out agreements.
“We’ve seen a real increase.”
Sutton said while contracts could be viewed as “unromantic” there was an increased awareness of divorce or separation pitfalls when it came to dividing up finances and assets.
Vstock
Pre-nuptial and post-nuptial agreements are known as contracting-out agreements in New Zealand as couples entering the agreement are “opting out” of the Property (Relationships) Act 1976.
She said it was a good idea to sit down at the start of a relationship when you still get along, “and have a mature chat about a pre-nup”.
Auckland Family Law director Graeme Stanton said he had seen the landscape of divorce law change over the 35 years he has been practising, and contracting-out agreements were no exception.
He said in Europe, pre-nups were “standard operating procedure” for marriages, but Kiwis took the “she’ll be right attitude”.
But that hadn’t been the case in the last five years, he said, as couples “don’t like what would happen under the Property Relations Act”.
There was “no doubt” contracting-out agreements were becoming much more popular, especially with younger couples, he said. And parents were often driving this, to protect their investments.
Couples would rather do a contracting-out agreement than a separation agreement, which, he said, included “stress and strife and a lot of disagreements”.
RNZ
Today on The Detail, Emile Donovan discusses what the divorce laws are, as they stand and how sensibilities around marriage have changed in the past 40 years.
SOS Success divorce coach and mediator Kelly Sutton said couples should look at a contracting-out agreement early, “so you know your property is separate and safe”.
Entering a second marriage, especially with children, was another good reason for a contracting-out agreement, as it would enable you to protect children from losing out to a new partner.
“Coming out of a marriage, you need to protect your assets,” Sutton said.
And it doesn’t just apply to couples tying the knot.
Sutton said savvy 40- and 50-year-olds tended to bring out the pen and paper before the relationship became “defacto” in the eyes of the law.
Defacto status is generally reached when an unmarried couple has been together for three years, but in a court of law, they don’t need to be living together. It can be based on how finances are shared, any mingling of funds, how friends perceive the relationship and if the relationship is sexual.
التعليقات