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What is a Contracting Out Agreement?

A contracting out agreement, often referred to as a prenuptial or postnuptial agreement, is a legal document that allows couples to opt out of the automatic provisions of the Property (Relationships) Act 1976.


This type of agreement is particularly useful for individuals entering a new relationship who want to protect their assets from previous partnerships and avoid the standard 50/50 division of property in the event of separation.


For those with significant assets from a prior relationship, a contracting out agreement can safeguard these assets from being included in any division of property. This is crucial for individuals who want to ensure that their investments, inheritances, or properties remain secure.


To make a contracting out agreement binding, both parties must have independent legal advice before signing. Once in place, these agreements are difficult to overturn making them a reliable means of asset protection.

What should a Contracting Out Agreement cover?

Asset Division

Contracting out agreements can specify how properties and assets will be divided, covering aspects such as:

1. Occupational Rights

The agreement can detail each party's rights to continue living in a shared home or occupy specific properties after separation. This clarity helps prevent disputes over living arrangements and financial responsibilities.

2. Intermingled Assets

In cases where assets obtained during the relationship become mixed with pre-existing assets, the agreement can clarify how these will be treated. This can help avoid confusion and potential conflicts over shared or combined property.

3. Estate Claims

Couples may include clauses stating that they do not wish to make claims against each other’s estates if one partner passes away. This can provide peace of mind and ensure that each party's wishes regarding their estate are respected.

4. Involving a Insurance Adviser

Given the complexities involved in drafting a contracting out agreement, both parties should consult with an insurance advisor to provide tailored insurance packages to fund a partner or their adult children's (from a previous relationship) entitlements.

5. Review regularly

It is important to review this document every few years or if there is a significant change to your relationship, i.e., having a child or a spouse being permanently disabled or becoming unwell and unable to work. If you have taken out an insurance policy, this should be reviewed annually to ensure the cover is sufficient.


Contracting out agreements are invaluable tools for couples in New Zealand looking to protect their assets and clarify their intentions regarding property division. By setting out clear terms and obtaining independent legal advice, individuals can safeguarding their financial interests. These agreements are particularly beneficial for those with significant pre-existing assets and can help mitigate potential disputes down the track.


Feel free to book a FREE 30-minute consultation here with one of our team, who can discuss whether a Contracting Out Agreement is right for you.

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Unsure if you need a Contracting Out Agreement?

Book a FREE 15-minute consultation with one of our team, who can discuss whether a Contracting Out Agreement is right for you.

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