Do you need a contracting-out agreement?
The Property (Relationships) Act 1976 ("PRA") applies to couples who are married, in a civil union partnership, a de facto relationship, as well as same-sex couples. The PRA presumes an equal contribution by each partner and aims to achieve a just division of relationship property when the relationship ends. A partner’s contribution is not limited to financial contributions but also other things such as looking after the children, the household or property belonging to the couple.
Couples may prefer that the PRA does not apply to all or some of their relationship property. This could either be in anticipation of or during a relationship, or at the end of a relationship. A contracting-out agreement
would then be necessary to achieve this. The PRA sets out certain formalities which are required for a valid contracting-out agreement. These requirements include that:
each party must have independent legal advice before signing the agreement;
the signature of each party must be witnessed by a lawyer;
the lawyer witnessing the signature must certify that he or she explained the effect and implication of the agreement to that party.
At times couples try to save money by doing their own agreements without involving lawyers. This can often result in higher legal costs when having to approach a court to validate such agreement. There is also the risk that creditors may still have a claim to some of your assets which you may have thought were taken out of their reach.
Feel free to contact us if you need any advice on PRA or any other legal issues at info@kempsolicitors.co.nz or 412-6000.