In New Zealand, a prenuptial agreement is legally known as a Contracting Out Agreement — and it’s available to both married couples and de facto partners. It’s the only way to legally override the default 50/50 relationship property split under the Property (Relationships) Act 1976.
A Contracting Out Agreement (COA) is a legally binding agreement between partners that changes the default property split rules. Both parties must sign the agreement and — critically — each must receive independent legal advice before signing. Without proper legal advice and execution, the agreement can be set aside by a court. Cost: $1,500 – $4,000 in legal fees. They are most commonly used to protect pre-relationship assets or inheritances.
What Can a Contracting Out Agreement Do?
A COA can be used to:
| Purpose | Example |
|---|---|
| Protect pre-relationship assets | Keep a house owned before the relationship as separate property |
| Protect inheritances | Ensure an inheritance remains separate even if partially used for joint purposes |
| Agree on a different split | e.g., agree on a 70/30 split rather than 50/50 |
| Define what is and isn’t relationship property | Customise the default rules |
| Protect a family business | Ensure a family business isn’t affected by a relationship property claim |
| Provide for children from a previous relationship | Protect assets that the partner wants to pass to their children |
When Can You Enter a COA?
A Contracting Out Agreement can be made:
- Before the relationship begins or formalises (traditional “prenup”)
- During an ongoing relationship (can be made at any point while the relationship continues)
- On separation (though at this point it’s usually called a separation agreement)
The agreement can also be updated during the relationship as circumstances change (e.g., receiving a large inheritance, starting a business, having children).
Requirements for a Valid COA
For a Contracting Out Agreement to be legally valid in NZ, it must meet all of the following:
1. In writing
Must be a written, signed document. Verbal agreements are unenforceable under the Act.
2. Both parties must receive independent legal advice
This is the most important requirement. Before signing, each party must:
- Consult with their own separate lawyer (not the same lawyer)
- Receive advice about the effect and implications of the agreement
- Understand what they are giving up
The lawyers must certify in writing that they gave this advice.
3. Signed in the presence of a witness (usually the lawyer)
4. Entered into freely
If a court finds the agreement was signed under pressure, duress, or without genuine understanding, it can set the agreement aside.
When a Court Can Set Aside a COA
Even a properly executed COA can be overridden by a court in certain circumstances:
| Circumstances | Court’s power |
|---|---|
| Signed under duress or undue influence | Can be set aside entirely |
| Signed without proper understanding of consequences | Can be set aside |
| Circumstances have changed so significantly that enforcement would be unjust | Court can vary or set aside |
| Agreement would leave one party with “serious injustice” | Court has discretion to depart from the agreement |
| One party concealed assets during negotiation | Can be set aside |
The “serious injustice” provision is significant — NZ courts have set aside COAs where enforcing them would leave one partner in severe financial hardship, particularly where there are children involved and the primary caregiver would be badly disadvantaged.
Cost of a Contracting Out Agreement in NZ
| Party | Legal fees |
|---|---|
| Your lawyer | $750 – $2,000 |
| Partner’s lawyer (separate firm) | $750 – $2,000 |
| Total combined | $1,500 – $4,000 |
More complex agreements (involving trusts, companies, overseas assets, or significant property portfolios) can cost $5,000–$10,000+.
Both parties bear their own legal costs — the costs cannot be imposed on the other party.
Who Needs a Contracting Out Agreement?
A COA is most commonly useful when:
Significant pre-relationship assets If one partner enters the relationship with substantially more assets (a home, investments, business interests), a COA protects those assets from becoming relationship property.
Inheritance received during the relationship Without a COA, an inheritance can inadvertently become relationship property if it’s mixed with joint finances (e.g., used to pay off a joint mortgage). A COA can specify that inheritances remain separate.
Business ownership If one partner owns a business, a COA can ensure a separation doesn’t disrupt the business or require a forced sale to pay out a 50/50 split.
Children from a previous relationship If you have children from a previous relationship and want to ensure certain assets pass to them (rather than to a new partner), a COA combined with a will creates clarity.
Second marriages or long-term de facto relationships When both parties have established assets, a COA can be a mutual protection rather than one-sided.
What Doesn’t Need a COA
| Situation | What protects it (without a COA) |
|---|---|
| Pre-relationship KiwiSaver balance | Automatically separate property — tracked from relationship start date |
| Gifts received and kept in a separate account | Usually separate property if not mixed |
| Modest income differences | The 50/50 default is usually fair |
| Short relationships (under 3 years, no children) | Property Act doesn’t apply at all |
COA vs Relationship Property Agreement on Separation
| COA (during relationship) | Separation agreement | |
|---|---|---|
| When made | Before or during relationship | At or after separation |
| Purpose | Varies the rules prospectively | Divides actual assets upon separation |
| Both need lawyers? | Yes | Yes |
| Can a court set it aside? | Yes (in limited circumstances) | Yes (in limited circumstances) |
| Tone | Collaborative planning | Can be adversarial |
How to Get a COA
- Discuss with your partner — a COA only works if both parties genuinely agree; don’t spring it on them at the last minute
- Choose a family law solicitor — look for one specialising in relationship property
- Each party engages their own lawyer — they cannot share a lawyer
- Negotiate the terms — usually through lawyers exchanging drafts
- Sign in front of your respective lawyers — both lawyers certify they gave advice
- Store securely — keep copies with both lawyers and in a safe place