On 19 August 2013 the Marriage (Definition of Marriage) Amendment Act came into force. This amendment enables gay and lesbian couples to marry in New Zealand. Whilst this is an exciting time for many, it is important to take the time to consider the legal ramifications of any long-term or serious relationship. In particular, consideration needs to be made for the division of property, should the relationship break down, and what will happen in the event of a death of one or both parties. Not wanting to put a cloud over your big day... but you'll be a lot happier if you do something now, rather than leave things to chance later.
The law in New Zealand states when a marriage, de facto relationship or civil union ends, there is a presumption of equal sharing in all “relationship property” and debt. The Property (Relationships) Act 1976 defines “relationship property” as all property acquired for or during the relationship. This also includes property acquired by one party prior to the relationship commencing, if it is used for the benefit of the relationship. The definition further states that “relationship property” includes the family home, whenever it is acquired. The family home is generally defined as the main residence for the couple or family during the relationship.
In New Zealand it is possible to contract out from the presumption of equal sharing in all relationship property and debt. A contracting out agreement (also known as a pre-nuptial agreement) protects each spouse’s individual interests in property. Such an agreement specifies the ownership and entitlements of each party in the property and debt. Although a contracting out agreement can be obtained at any point during the relationship, it is recommended that an agreement is entered into as early as possible.
A contracting out agreement is recommended when:
- One party solely owns the family home; or
- There has been a previous relationship for one or both parties, resulting in significant property for one party; or
- There are children from a previous relationship and their interest or entitlement needs to be protected; or
- One party has significant debt; or
- You simply do not want to share assets and debt equally.
When a couple gets married any previous wills in force for either party are instantly revoked unless the parties’ wills were specifically made in contemplation of marriage. This means that unless a new will is made, if a party dies they are intestate and their property will be divided according to the Administration Act 1969.
Go forth and enjoy! This is a day to celebrate for many New Zealanders and there will be a new energy and enthusiasm for marriage across the country. Just remember to protect what you have worked hard at your whole life.