Why You Need A Prenup Ft. Amanda Donovan

By Lighthouse | July 24, 2023 | 10 Min read

Navigating the complexities of financial planning in a relationship can be a daunting task, particularly when it involves discussions around prenuptial agreements. Often clouded in misconceptions and unease, prenuptial agreements, or ‘prenups’ as they are commonly known, are tools of financial clarity and protection, not predictors of relationship doom.

Why Do You Need a Prenuptial Agreement?

The most compelling reason to get a prenup lies in the protection it offers to separate property such as personal savings, inheritances, Kiwisaver funds, and interests in trusts. This agreement clearly stipulates the ownership of these assets, safeguarding them from potential disputes down the line.

When Should You Be Thinking About a Prenuptial Agreement?

Timing is crucial when it comes to prenups. It’s advisable to think about it when setting up a trust, or when you start cohabiting. In New Zealand, for example, once a couple has been living together for three years, they are considered de facto and property rights can be invoked. The closer you get to this three-year mark without a prenup, the more complex the process becomes.

What Assets Are Typically Classified as Separate Property?

Separate property typically includes assets acquired before the relationship, gifts, inheritances, trust interests, and in some cases, assets acquired during the relationship from third parties. Parents, for example, often gift their children money to buy their first homes, and these gifts are usually considered separate property.

Common Mistakes Made in Prenuptial Agreements

Entering the realm of prenuptial agreements without expert guidance can lead to pitfalls. Common mistakes include leaving it too late, at which point the other partner may refuse to sign. It’s also crucial not to perceive prenups as ‘passion killers’ – consider them instead as responsible financial planning.

Another mistake is not consulting a specialist. Prenuptial agreements require foresight, or what might be referred to as ‘crystal ball gazing’. Young couples planning for children, for example, need expert advice to avoid potential income provision errors.

Are Prenuptial Agreements Worthwhile?

Absolutely, but only if executed correctly. The structure of a prenup will differ based on the couple’s unique circumstances. A second-time couple will have different considerations compared to a couple in their 20s or 30s. Incorporating relationship property in these agreements ensures they stand the test of time.

The Interplay of Trusts and Prenuptial Agreements

Even if you have a trust, you still need a prenuptial or ‘contracting out’ agreement. Trust powers have been classified as property in certain trust deeds, and every purchase could potentially be deemed a nuptial settlement. Furthermore, transferring what you perceive as separate property to a trust for protection can be tricky without an agreement in place.


Prenuptial agreements are not the enemy of romance; they are shields of protection for your assets and financial future. These documents, when properly drafted, help avoid conflict and financial confusion. Engage a specialist to ensure you get your agreement right, offering both parties peace of mind.

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