Why ‘Contracting Out’ is the New Norm for Kiwi Couples

When you’re about to get married, the focus is usually on shared dreams and building a life together. Talking about legal documents like a relationship property agreement or contracting out agreement (often known as a “prenup”) can feel like an unromantic distraction

However, we’ve noticed a significant shift in recent years. Far from being a sign of distrust, the contracting out agreement in NZ has become the new norm for couples of all ages. It’s no longer just for the rich and famous. It has become a practical, compassionate tool used by many Kiwis to protect their futures and, ironically, strengthen their relationships through honesty.

If you’ve been wondering, “What is a contracting out agreement?” or why so many people are talking about them, let’s pull up a chair and look at why this is becoming a staple for the modern Kiwi couple.

The Reality of the “Three-Year Rule”

In New Zealand, the Property (Relationships) Act 1976 is the default rulebook for couples. In simple terms, once you have lived together in a de facto relationship for three years (or if you get married or enter a civil union), the law generally presumes that your property will be split 50/50 if you separate.

This sounds fair in theory, but it doesn’t always account for individual journeys. You might have spent a decade saving for a house deposit before you met your partner, or perhaps you’ve inherited a family heirloom you intend to pass down to your children. Without a contracting out agreement, those separate assets can quickly become “relationship property,” subject to that 50/50 split.

Why Couples are Choosing to “Contract Out”

1. Protecting the Bank of Mum and Dad

With Auckland house prices where they are, many first-home buyers receive help from their parents. If your parents have gifted or loaned you $100,000 for a deposit, they likely intend for that money to stay with you. A contracting out agreement ensures that if the relationship ends, that specific contribution is protected and returned to you (or your parents), rather than being halved.

2. Safeguarding Children’s Inheritances

We are seeing more blended families than ever before. If you are entering a new relationship but have children from a previous one, you have a natural, heart-led desire to protect their inheritance. An agreement allows you to “ring-fence” specific assets—like the family home or a trust interest—to ensure your children’s future remains secure regardless of your relationship status.

3. Clarity for Business Owners

If you’ve poured your blood, sweat, and tears into building a business, the last thing you want is for a relationship breakdown to force a sale or a liquidation. By identifying your business as “separate property,” you create a shield that allows the business to keep operating smoothly, providing certainty for you, your business partners, and your employees.

4. Avoiding the Emotional (and Financial) Cost of Conflict

Separations are inherently emotional. When there is no agreement in place, the legal battle over “who gets what” can drag on for years, costing tens of thousands in legal fees and causing deep-seated resentment. A contracting out agreement is a gift to your future selves. It provides a clear roadmap, significantly reducing the potential for conflict during an already difficult time.

It’s a Conversation, Not a Confrontation

We often hear from clients who are nervous about bringing this up with their partner. Our advice? Approach it with heart. Explain that it’s about certainty, not a lack of love. It’s about making sure both of you feel secure and that your individual histories are respected.

To be legally binding in NZ, the process is very specific:

• The agreement must be in writing.
• You must both receive independent legal advice from different lawyers.
• Your lawyers must certify that they have explained the implications to you.

These safeguards are there to ensure that neither person feels pressured and that the agreement is fair and robust enough to stand the test of time.

Shanahans Law: Protecting Your Journey Together

At Shanahans Law, we’ve been part of the New Lynn community for over 65 years. We understand that behind every contracting out agreement is a human story. We don’t just “process” documents; we listen to your concerns and help you craft an agreement that reflects your unique circumstances.

We pride ourselves on being approachable and straightforward. We’ll take the “scary” out of the legal talk and help you and your partner build a foundation of transparency.

Is it time to have the conversation? Contact us today about protecting your relationship property.

Frequently Asked Questions

When is the best time to sign a contracting out agreement? 

Ideally, you should sign an agreement before reaching the three-year mark of living together, or before getting married. However, you can actually enter into one at any stage of your relationship. It’s often easier to have these conversations when things are going well, and you are both feeling generous and fair.

Can we just write our own agreement and sign it? 

Unfortunately, no. For a contracting out agreement in NZ to be legally binding, it must be in writing and signed by both parties. Most importantly, as mentioned above, each person must receive independent legal advice from a different lawyer. Those lawyers must certify that they have explained the effects and implications of the agreement to you. Without this, the agreement is generally void.

Does an agreement cover future assets, like a future inheritance? 

Yes, it certainly can. You can specify that any future inheritances or gifts from your family remain your separate property, even if you use that money to pay off a joint mortgage later on. This is one of the most common ways to future-proof your finances.

Can an agreement be overturned or set aside in court? 

The Court has the power to set aside an agreement if it believes it would cause serious injustice. This usually happens if the agreement was very unfair when it was signed, or if life has changed so much (like having children) that the original agreement no longer makes sense. This is why we recommend reviewing your agreement every few years or after major life events.

Disclaimer: The content of this blog is for general informational purposes only and does not constitute legal advice. While we aim to provide helpful information about legal processes, all legal situations are unique and fact-dependent. You should always seek specific legal advice from a qualified solicitor, whether at Shanahans Law or in another firm, regarding your individual circumstances before making any legal decisions. Reliance on the general information provided here is at your own risk.