The Law Commission has recommended continued support for pre-nups in any legislative change. Relationships fail and a third of marriages end in separation. Going to court is notoriously slow and expensive.
The New Zealand Law Commission in its 2019 review of Relationship Property said:
The law should continue to enable partners to make their own decisions about how to divide their property before or during a relationship, and in order to settle any differences that arise between them. The procedural requirements in the law should continue to apply (meaning the agreement must be in writing and witnessed by a lawyer who gives independent advice about the implications of the agreement).
The law strikes the right balance between allowing partners the freedom to make their own agreements about how their property should be divided on separation, while protecting vulnerable partners by ensuring that they enter such agreements with informed consent.
So, the law is going to continue to allow for these agreements and to support them unless they are “seriously unjust”.
The 2019 Grant Thornton Relationship Property survey found:
- Growing apart/falling out of love was by far the most common reason for separation, named by 75% of respondents, up from 67% in 2017. Extra-marital affairs were second, up slightly at 57%, with unreasonable behaviour also up slightly to 31%.
- Relationships of between 10 to 20 years are the most likely to separate.
- Those in their forties are the most likely to separate but there was a strong rise in the need for advice on separation agreements and pre-nups for the 50+ age group.
- The most common relationship property pool included assets valued from $500,000 to $1 million.
- The number one problematic issue encountered by family lawyers was systemic delay in the Family Court.
- Many lawyers think court time allocation for relationship property cases has become worse.
Statistics New Zealand’s 2019 report “Good things take time” told us that people are getting married later and less often, having children in their 30’s and separating at the same rate (overall about a third of marriages end in separation).
Far more people are living together as couples these days and once they have lived together for 3 years or more, Relationship Property law applies to them (even if they don’t want it to).
With property prices as they are (the NZ median house price in March 2020 was $665,000) many first home buyers are going to be borrowing from the bank of mum and dad. If you want to protect that money, you are going to need a pre-nup. Otherwise, after three years living together, the house will be relationship property and the presumption is a 50/50 split of the net value.
Relationships fail and the courts can’t deal with disputes quickly or cheaply. There is often a lot of money at stake, and you want to be able to sort it out fairly and efficiently.