Contracting Out Agreement New Zealand

Contracting Out Agreement New Zealand: Everything You Need To Know

Contracting out agreements are also known as prenuptial agreements or prenups, which are legal contracts that are designed to protect assets in the event of a separation or divorce. While they are becoming increasingly popular around the world, contracting out agreements have been a common practice in New Zealand for many years.

In New Zealand, contracting out agreements are legally recognised by the Property (Relationships) Act 1976. This act outlines the legal formalities that must be followed in order to make a valid and enforceable contracting out agreement.

So, what exactly is a contracting out agreement, and how does it work?

A contracting out agreement is a legal document that is drawn up between two people who are about to enter into a marriage, civil union or de facto relationship. The agreement specifies how the couple`s assets and liabilities will be divided if they separate or divorce.

It is important to note that a contracting out agreement does not prevent a couple from dividing their assets and debts equally if they choose to do so. Instead, it provides a framework for the division of assets and liabilities in the event of a separation or divorce.

A contracting out agreement can be particularly useful for people who have significant assets or liabilities prior to entering into a relationship. It can help protect these assets in the event of a separation, and can also provide peace of mind for both parties.

However, it is important to seek legal advice before entering into a contracting out agreement. There are strict legal requirements that must be met in order for the agreement to be enforceable, and a lawyer can ensure that the agreement complies with these requirements.

As with any legal document, it is also important to ensure that both parties fully understand the terms of the agreement before signing it. This includes understanding how the couple`s assets and liabilities will be divided in the event of a separation or divorce.

While contracting out agreements may not be the most romantic of topics, they can provide a practical and sensible safeguard for couples who want to protect their assets in the event of a separation or divorce. If you are considering entering into a contracting out agreement in New Zealand, it is important to seek legal advice and ensure that you fully understand the terms of the agreement before signing it.