KEY POINTS:
With this prenup I thee wed - or at least enter into a relationship. It's an increasingly common scenario among Kiwi couples, particularly since the introduction of the 2002 Relationship Property Act.
The new rules mean that after three years together, all de facto partners aged 18 and
over, not just married couples, are entitled to an equal share of property collected during their relationship.
Lawyers questioned by the Herald on Sunday said gay couples, high-flying businesswomen living with jobless men, or those getting hitched for the second time were keener than ever to ensure their assets were protected in case of a nasty break-up.
Auckland QC Deborah Hollings, who drafts up to 30 agreements a year, compared to a handful before the law change, said she had seen the number being disputed after relationship strife rise by almost two-thirds.
For the richer half of a well-off couple, not having a prenup was a sure-fire route to a financial king-hit, she said. "There is so much at stake. Tax takes 39 cents of every dollar, the Relationship Property Act takes 50 cents of the dollar."
Although some may consider them less than romantic, Hollings said Kiwis were becoming more used to prenups and it was more common for both parties to be happy with having one.
But she said it was equally common to hear of brides told to sign an agreement hours before the so-called happiest day of their life - or risk having the wedding called off.
Hollings said that was bad for both parties. It would be humiliating for the bride and unwise for the groom because "it then becomes more challengeable later in court, especially if the agreement largely favours him".
She said anyone entering a relationship where they were the wealthier party should seek legal advice and recalled the advice she gave one high-flying Auckland man, forced to fork out more than he would have liked after his previous de facto relationship went bust.
"I told him, 'You are a wealthy man, you are not to enter into a de facto relationship without a prenuptial agreement. Don't let them move in without signing'.
"He said, 'Listen Deborah, don't worry, I'm not letting anyone stay past 3am without signing one'. I don't know if he kept one under his mattress or what."
According to Professor Mark Henaghan, dean of Otago University's Law faculty, a problem with prenups is that the new law makes it much harder to pinpoint the start of a three-year de facto relationship.
"Is it when you first hold hands, when you start staying one or two nights together or when you start sleeping together?"
Hollings said drafting an agreement properly could cost up to $12,000 in legal fees for larger estates.
She said it wasn't uncommon for figures of up to $200 million to be involved in divorces, although most big-money bust-ups were settled out of court.
"More than 90 per cent settle out of court," said Wellington lawyer Lance Pratley. "A lot of family lawyers wouldn't start any proceedings over the course of a year. Cases can get very bitter and protracted," he says.
Henaghan said there were also risks in going to court. "You can never guarantee anything with judges."
Eva Ho, of Auckland firm Focus Law, said money troubles had increased interest in prenups, as many partners became spooked by the recession.
Finance was at the forefront of people's minds with the strain of collapsing businesses.
"When the market started to turn, in the first and second quarters of this year, [we] received a noticeably higher number of inquiries about matrimonial law."
There are no firm figures on the number of prenups in New Zealand, although Henaghan is planning to research the issue this summer.
Family law specialist Geoff Harrison said all types of couples were taking up the prenup trend, or at least seeking legal advice.
The Civil Union Act had led to an increase in gay and lesbian couples signing prenups, and the wealthier halves of de facto couples were cottoning on to the financial risks their relationships could pose.
"That includes many wealthy businesswomen, as well as men."
Second marriages were also fuelling a rise in the prenup, or section 21 as it's known in the legal world.
He'd come across one settlement where the couple had agreed to share custody of their two "fancy" dogs, but nothing like what had been seen in California, where one businessman stipulated he would get the "pick of the litter" when it came to which kids lived with him. Another requested a minimum number of sex sessions a week before he agreed to marry.
Prenups were also common when someone married a "mail order" bride or met an overseas partner on the internet. But Harrison said for most young first-time newlyweds, a prenup wasn't necessary.
That saved a rather awkward discussion: "Because there's nothing romantic about signing a pre-prenup."
- Cliff Taylor
COMMON SCENARIOS
* One of the highest-profile cases was Harrison v Harrison. He owned a farm worth tens of millions of dollars and, as the three-year threshold approached, he began thinking about a prenup.
They separated but he agreed to reconcile providing she signed an agreement that protected his farm if they split. When they did, Mrs H contested the agreement and said she signed under duress. The High Court agreed, but the Court of Appeal overturned the decision, ruling that because she'd signed it, she was stuck with it.
* Auckland QC Deborah Hollings says a common scenario involves married couples whose circumstances change during their relationship. He might have had a fledgling business before meeting his future wife. They sign a prenup stating he'll get the business if their relationship goes bust but all other assets will be halved.
Fast-forward 25 years. They have three grown children - she stayed at home raising them, he worked hard and his business is worth $40 million. A midlife crisis hits and they file for divorce. According to the agreement, her settlement may be around $2m. She says circumstances have changed and a judge overturns the agreement, increasing her share to a more even level.
* Another high-profile case was Benton v Miller and Poulgrain in 2005. Mr and Mrs Benton held property in separate names. Mrs Benton owned 71 per cent of a Pauanui property worth $70,000. Mr B owned the rest and a property in Auckland.
In 1986 Mr B sold his Auckland property for $70,000 and bought Mrs B's interest in the Pauanui property for $49,000. The couple separated, and Mrs B filed for a half-share in the Pauanui property because it was their matrimonial home. Mr B tried to argue it was "separate property" but had to pay $90,000 - half the home's then-value.
He successfully sued his lawyer for that sum, arguing that if he'd known the risk, he would have made his wife sign a prenup agreement.
