I was recently interviewed by Seven Sharp on TV one, they wanted a lawyers perspective on Prenuptial Agreement or as most lawyers refer to them “section 21 Agreements.” 

They are called this as it is section 21 of the Property (Relationships) Act 1976 that allows a couple to contract out of the Act.  The net effect being the presumption of a notional half share of relationship property would not occur on the breakdown of a relationship.

Prenuptial Agreement or S21 Agreements can be done at any time during a relationship and this surprised the people I was talking with.  They believed you could only do this before the three year point of a de facto relationship or before marriage.

But in fact you can have a lawyer draft such an agreement at the beginning, during or at the end.  An Agreement drafted during a relationship is often because you inherited something from your family’s estate and wish for it to remain your separate property.  At the end of your relationship, if you can come to agreement between you on how you wish to settle your matters, this can be recorded in a prenuptial agreement or s21 Agreement.

What surprised me the most was the question that came up over again which was “how do I tell someone I want to do this?”

This really surprised me.  The majority of people I spoke with said the biggest stumbling block for them would be the conversation and how to broach it.

I would have thought once you get naked with someone then you can broach any subject but clearly I was wrong.

So to answer this I would say that you talk about this issue at the beginning of your relationship when you know you are serious about this person.  Even if you do not have any assets at that time and many of you won’t, talk about what you would do if Aunty Mavis left you the beach house in Eketahuna and what you would like to see happen with that property.  It may be you would want a prenuptial agreement or S21 agreement as you have a strong emotional attachment, and could not bear to part with it as relationship property should you break up.

You can try on as many different scenarios as you like.  Once you start talking about it, it should be like any conversation you have with your partner such as where you want to live, what travelling you want to do and how many children you are going to have and so forth.

There is nothing wrong with identifying something that has value to you that you would not want to part with should your relationship end.

The issues occur when these conversations are not had and from my practice issues come about in the following ways.

Scenario one

You have been together for several years and have a child together and your partner (often several days before a marriage) slaps down an Agreement and demands you sign it.  Sadly, I have seen this a lot and while I would like to tell you to put your Nike’s on and run for the hills I know you won’t.  So all I can say is get good independent legal advice and think carefully about what this means to your relationship and more importantly the contributions you have made thus far and will continue to make.

 Scenario two

You have been in a long term relationship (similar to the scenario above) and you are being asked to sign a prenuptial or s21.  It is not unexpected you are aware your partner is bringing more into the relationship financially and this has been discussed in a general way between you.  Again, you need to get independent legal advice.  You also need to be aware before signing any Agreement that your contribution is seen as equally important to the relationship even if you have taken time out of the work force to raise children and run the home.  That is if you were to break up and there was no Agreement you would be entitled to your notional half share of all relationship property.  Therefore, it is not just about the money one person is earning or what they bought in at the start of the relationship.

Save yourself the angst and possible damage to your relationship and talk about these issues at the beginning.  You know when you are serious about someone it may be on day three or day three thousand but there comes that point in time when you know you want to be with the person and that is time to start talking.

P.S.

I was also frequently asked

“ but if the person tells me they would never take what they know is my separate property because they know how much it means to me, is that enough to protect it if we should break up?”

short answer, no

longer answer, seek legal advice.

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