While sitting back and taking stock of the year that was and enjoying a (hopefully hot) summer break, you may find yourself contemplating moving in with your partner, or a marriage proposal.

If this is you, then you have an incredibly exciting time ahead and there are so many things to consider.  Whether it is where to live, who will bring the washing machine or if you are getting married, who to invite and what flavour your cake should be, there are the less exciting but equally important considerations around legal and financial matters that you need to think about.
Unless you are both starting from ground zero, it is common for two people to come together with assets they have already acquired during their lives including Kiwisaver (which is often overlooked).  It’s also not uncommon for one party to bring all the assets while the other brings very little.  Whatever the circumstances, you should be informed about the Property (Relationships) Act and consider whether to enter into a Contracting Out Agreement to protect the assets.  Entering into an Agreement doesn’t mean you cannot create a joint life and build assets together, it just clearly establishes the understanding between you in the event that things don’t go to plan.
When a couple have been in a de facto relationship, and/or marriage for three years or more, then the provisions of the Property (Relationships) Act 1976 applies.  Should you separate or if one of you dies after three years , the Act provides for a starting point of equal division of all relationship property.  This may not be desirable, especially if an asset you’re bringing into the relationship automatically becomes relationship property after three years ie. home and chattels (boats, cars, pets, knives and forks etc).  Other assets that become relationship property include anything that you acquire during your relationship, regardless of who paid for it, eg. Kiwisaver, income, savings, life insurance policies etc.  There are few exceptions where separate property is created without it being recorded in a Contracting Out Agreement.  Importantly, it does not matter if you both agree, ‘what’s mine is mine and what’s yours is yours’.  When parties separate, things that were agreed to when things were good, have no legal status.
So, before your relationship hits the three year mark, it is wise for you and your partner to consider the assets you have brought into your relationship (including savings, Kiwisaver, inheritances, your rare stamp collection or other equally important items) and seek legal advice from a Family Law specialist about the implications of the Act. Doing so gives you the opportunity to contract out of the Act if you and your partner agree that certain identified assets (or liabilities) should not be classified as relationship property going forward.  While it may seem awkward at first, it doesn’t hurt to find out where you stand from a legal point of view so that you can make an informed decision going forward.

Schnauer & Co,
1 Shea Terrace, Takapuna
09 486 0177
schnauer.com