Contracting out agreements, often referred to as prenups, are used by couples in New Zealand who want to decide in advance how their property will be divided if the relationship ends. These agreements can offer financial certainty and protect assets acquired before or during the relationship.

Under the Property (Relationships) Act 1976, relationship property is normally divided equally when a qualifying relationship ends. This applies to marriages, civil unions, and de facto relationships that have lasted three years or more. In some cases, relationships under three years may still qualify, such as when the couple has a child together.

A contracting out agreement allows couples to opt out of the default equal-sharing rules. However, the agreement must meet strict legal requirements to be enforceable. If it does not, the Family Court may declare it void or set it aside.

Legal requirements for a valid contracting out agreement

To be legally binding in New Zealand, a contracting out agreement must:

• Be in writing and signed by both parties

• Be signed only after each party receives independent legal advice

• Have each signature witnessed by a separate lawyer

• Include a lawyer’s certificate confirming the terms and implications were properly explained

If these steps are not followed, the agreement is technically void. Although the court may validate parts of a non-complying agreement, this is rare if non-compliance has caused material prejudice to either party.

If either person signed without:

• Independent legal advice

• Proper witnessing

• A clear understanding of the effect of the agreement

The court is unlikely to enforce it.

When can the court set aside a valid agreement?

Even when all legal formalities are met, a contracting out agreement may still be overturned if it creates serious injustice. The court will assess factors such as:

• Whether the agreement was fair at the time it was signed

• Changes in circumstances (like having children or financial hardship)

• The length of the relationship

• Non-financial contributions such as caregiving and homemaking

• Any significant imbalance of power between the parties

For example, if one partner waived rights to the family home early in the relationship but later spent over a decade caring for children, that agreement may be judged unjust and could be set aside.

Other grounds include:

• Duress or pressure to sign

• Undue influence or manipulation

• Unconscionable or one-sided terms

• Failure to plan for major life changes

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How to reduce the risk of your agreement being overturned

To protect your agreement:

✔ Use separate lawyers
✔ Avoid last-minute pressure
✔ Include a review clause
✔ Be transparent about finances
✔ Ensure fairness for both parties

This is where working with an experienced relationship property lawyer is essential.

If you are in Masterton or Wellington, the team at Core Legal can assist with:

• Drafting and reviewing contracting out agreements

• Relationship property advice

• Separation and asset protection

• Independent legal advice for both parties

👉 Visit: https://corelegal.co.nz/
👉 Wellington services: https://corelegal.co.nz/wellington-lawyers/
👉 Masterton services: https://corelegal.co.nz/masterton-lawyers/

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Frequently Asked Questions (FAQ)

Can a prenup be overturned in NZ?
Yes. A court can set it aside if it causes serious injustice or does not meet legal requirements.

Do both people need their own lawyer for a contracting out agreement?
Yes. Independent legal advice is mandatory for both parties.

When should a contracting out agreement be reviewed?
Whenever major life events occur – such as having children, buying a home, or significant changes in income or health.

What if one person lied about their assets?
Lack of transparency can be grounds for the agreement to be challenged.

Who can prepare a contracting out agreement in Wellington or Masterton?
Qualified relationship property lawyers such as Core Legal can prepare and advise on these agreements.