Kiwis embrace prenup contracts

Photo / Bay of Plenty Times

More couples in New Zealand are being compelled into stressful and awkward prenup negotiations - even without getting married.

Since a law change in 2002, courts can split up couples' assets on the basis of little more than living together for three years.

The change in the Property (Relationships) Act also expanded the range of assets at risk upon separation from just the family home to virtually anything shared.

The New Zealand Law Society's Family Law Committee chairman, Antony Mahon, said couples could no longer live together without feeling an impending pressure.

"After they've lived together, the time starts to tick and the pressure becomes greater and greater the closer they get to three years," Mr Mahon said.

Couples can be compelled by time to suggest a prenuptial agreement, breeding stress and distrust.

"It's one of the most difficult areas for a family lawyer because for some couples it's extremely stressful - one side thinks: 'Don't you trust me?'," Mr Mahon said.

Whether a couple is in a de facto relationship is considered on a case-by-case basis, but living together, having a physical relationship and sharing belongings all contribute.

"They're in the boom of their relationship and they don't think it can be otherwise. It can cause a great stress on the relationship," Mr Mahon said.

Many more people were seeking lawyers in recent years to sign a prenuptial agreement. But many, particularly women, had previously been disadvantaged and left vulnerable after separations, and on balance the law change had improved their situation, Mr Mahon said.

Auckland family lawyer Simon Jefferson said anyone with sizeable assets was now looking at prenuptial agreements, which had lost their stigma in New Zealand.

"I think the squeamishness we used to have about the lack of romance is gone. We have come to grips with that," he said.

People who had been burned before in a separation and older people with wealth were most likely to negotiate prenups.

"I don't see a lot of young people doing it - for pragmatic reasons. They don't have a lot to lose. It's a lot in legal fees for an exercise in theory," Mr Jefferson said.

Another family lawyer, Kirsty Swadling, said it was crucial to review and update agreements every five years, but these were few and far between.

MISSION POSSIBLE

* Katie Holmes' father, a divorce solicitor, represented her in a prenuptial agreement with Tom Cruise on their marriage in 2006.
* For every year that Holmes remains married to Cruise, she will accrue US$3 million, up to a maximum of US$33 million.
* If the marriage lasts longer than 11 years but then breaks up, Holmes will be entitled to half of Cruise's fortune.