Many of us don’t just have one lifelong relationship anymore, either. It’s normal to go through a few long-term partners, and not everyone gets married. 

But the rules around relationship property still impact the unmarried. De facto relationships are just as legally binding under the law after three years of living together as a couple. 

Put simply, relationships are more fluid, assets are more complex, and the traditional 50/50 default doesn’t suit every situation.

That’s why thinking about relationship property agreements is more relevant than ever.

More from Opes:

• Should I Get a Relationship Property Agreement? + How To Set One Up
• Horror Stories From Broken Relationship Property Agreements
• How to rebuild your wealth after divorce

When should I get a relationship property agreement? (And when do I not need one?)

There are times when a contracting out agreement isn’t necessary. 

If you’re 18, starting from scratch, and neither of you own much, fair enough. You might not need a relationship property agreement. It might be more trouble than it’s worth.

Or if you’ve been together 20 years, raised kids, and built everything as a team – a 50/50 split probably makes sense.

However, a prenup is especially worth considering when:

#1 – You buy a house and one partner puts in more deposit

Let’s say you want to buy a house. Your parents give you $100,000 for a house deposit, so you’re putting in a bigger deposit than your partner. 

After 4 years you split up. Well, that $100,000 could be considered relationship property, so your partner takes half. 

But that might not have been what your parents wanted. They gave the money to you, not your partner. So you might want to have a relationship property agreement that protects your bigger deposit. 

#2 – You come into the relationship with more assets

You might meet the love of your life at 35. At that point, you’re successful. You have savings, shares and a home. And you built that all up before the relationship started. 

You move in with your partner, then 3.5 years later you break up. If you don’t have a contracting out agreement, they could take half of everything.

It doesn’t matter that you came in with more at the start. So a relationship property agreement could have protected you.

#3 – You start a business while in a relationship

Let’s say you are 25 years old. You’ve been with your partner for 5 years and you’re living together, so you are de facto. If you split everything is 50/50. 

That might be OK because you are young, you’re both working, and you don’t have many assets.

But then let’s say you and your mate start a business. It’s not worth much now, but it could be in the future. It could be worth setting up a relationship property agreement. 

Because if the business goes well, and then you split up, you might need to give your ex shares in your business, or have to buy them out. Either way, that could expose and impact your friend/business partner.

So, often when you start a business it can be a good time to put a relationship property agreement in place. 

But we’ll just break up nicely … right?

This is important. 

Only 10% of Kiwi couples have a relationship property agreement in place. 

And a lot of people just think that if they do break up it’ll be amicable. 

You might think: “We’ll just take back what we put in” or “We’re mature – we’ll split it fairly.”

You might think that when you’re in love and thinking logically, but that doesn’t happen. 

Breakups don’t bring out the best in people, especially if one partner has cheated or done something to hurt the other person.

And even if your partner is reasonable when the divorce happens, all it takes is a new boyfriend, girlfriend or grudge – and suddenly you’re both lawyering up. 

One person I know was with their partner for six and a half years. They had a Relationship Property Agreement. When it ended, he packed a bag and walked away. No drama or fighting, because it had already been agreed and sorted.

Have the tough conversation now when you’re in love and thinking clearly. Not later, when you’re angry and packing boxes.

What can the other person touch? 

In short: everything is up for grabs. Even assets in trusts.

Here’s a true story. A man ended a 26-year marriage. He kept the house at the end of the relationship, so he wanted to protect it from any future relationships.

That’s why he put his home in a trust.

Then he got into a new relationship. It lasted 10 years. When they split, she successfully challenged the trust.

The court ruled that the trust had been set up to deliberately prevent her from claiming relationship property. That’s not allowed. She got half.

So while a trust might help, it’s not bulletproof. A relationship property agreement gives you stronger protection.

How do I get a contracting out agreement?

You need to work with a lawyer to get a contracting out agreement. 

Your partner needs to talk to a separate lawyer too. 

That’s important: you must each get separate legal advice, otherwise the agreement could later be ruled invalid (more on this below).

The cost of a prenup varies widely. A straightforward agreement might start at around $1,500 + GST, but more complex agreement can easily cost $10,000 or more.

People often forget that death ends a relationship too, so many agreements include what happens if one partner passes away, as well as if the couple separates.

Ultimately, the cost depends on the complexity of your financial life. That means the number of assets you both have, how they’re owned, and what you both want the agreement to do.

Here’s why separate lawyers matter:

One couple’s partner didn’t talk to a separate lawyer. Instead, they used a lawyer friend. That lawyer didn’t tell them to use different law firms.

When the relationship ended, the agreement was invalid. She put in more money than him for the house and she thought she’d protected herself. In the end, her partner walked away with 50% of everything.

But what if my partner doesn’t want a relationship property agreement? 

I get it, signing a prenup with your loved one is uncomfortable. You don’t want to think about breaking up. You want to think about growing old together. 

So it’s important to discuss, but if your partner refuses to engage or sign anything then you need to make a decision. 

Because you have a choice:

• You either accept that risk that you’ll split everything 50/50
• Or you decide to end the relationship.

It sounds really hard, but those are your options (if your partner won’t accept any relationship property agreement). 

If you are uncomfortable with the risk, then it’s your responsibility to leave (harsh but true).

I’m not a lawyer. I’m not selling prenups. But I am telling you how the system works – and how to protect yourself in it.

You don’t have to like the law, but you do need to understand it. Because if you choose to ignore it, you don’t get to opt out of the consequences.