About to Hit Three Years Together? Is Your Home, Income, and Pre-Relationship Assets (Family Trust Assets) Still Legally Yours?

Relationships today don’t look like they did when the Property (Relationships) Act 1976 (PRA) was created. People meet later in life. Many already own homes, operate trusts, or have children from earlier relationships. Some couples maintain separate households for long periods. Others form blended or non-exclusive relationships.

Two Supreme Court decisions in 2023 have brought the PRA into clearer focus for these situations. If you’re in a relationship, thinking about moving in together, or managing trusts or property you owned before the relationship, it’s worth understanding the broad themes. You don’t need to become an expert. You just need to know when to seek advice before things become complicated. Or very costly.

How the law is shifting

New Zealand’s relationship landscape has changed significantly over the past few decades. The PRA has always aimed to achieve fairness, but the way it applies has evolved as real life has evolved. The 2023 Supreme Court decisions — Sutton v Bell and Mead v Paul — are a good example of the law adjusting to today’s realities.

What the Supreme Court clarified

1. Transferring assets before a relationship is not always protection.
In Sutton v Bell, the Court made it clear that if someone moves property (often into a trust) at a time when there is already a clear intention to form a relationship, that transfer can be reviewed. What matters is not just the date of the transfer but the purpose behind it and the stage the relationship had reached. The old assumption — that anything done “before the relationship” is automatically outside the PRA — is no longer safe.

2. Relationships don’t need to be exclusive to fall under the PRA.
In Mead v Paul, the Court recognised that some people live in non-exclusive or polyamorous structures. Two people may still be in a qualifying de facto relationship with each other, even if one or both also have a relationship with a third person. The Court looks at the reality of how you live and commit to each other, not the label you give it.

What this means in practice

These decisions don’t change the everyday reality for most couples — but they do make it more important to ensure your legal arrangements match how you actually live.

Below are a few scenarios when getting advice is sensible:

• You own property from before the relationship
• There’s a family trust involved
• You are in a blended family situation
• Your financial contributions are unequal
• You’ve been together a long time but life has changed
• You’re in a non-traditional relationship structure

In each of these situations, the PRA may step in automatically. The key is recognising it early enough to put proper structure around your intentions. Without it, you could be making a costly omission.

A more honest take on the “fairness” question

People often tell me it feels unfair that they need a formal agreement just to protect what they brought into a relationship. They’ve worked hard for their home, their savings, their business, or they just want to protect family assets for their children. Having to spend time and money contracting out of a law they never consciously agreed to can feel deeply frustrating.

Most couples don’t realise the PRA applies by default. You don’t sign up to it; you fall under it through how you live. You share a home, take on day-to-day responsibilities, support one another financially — and at some point, the law considers you to be in a de facto relationship whether you’ve discussed it or not.

That’s why people feel blindsided. They’re doing life together without thinking about the legal backdrop, while the PRA quietly operates in the background.

A contracting-out agreement doesn’t undermine your relationship. It simply ensures the work you did before the relationship, and the intentions you both share for the future, are respected. Yes, it takes planning, and yes, it costs money — but the alternative is far more costly if a separation occurs and the default rules apply in a way you never anticipated.

The role of contracting-out agreements

Not everyone needs a contracting-out agreement, but more people benefit from one than they realise. A well-crafted agreement provides clarity on:

• what each person is bringing into the relationship
• how property will be treated going forward
• how contributions — financial and non-financial — will be recognised
• what should happen if the relationship ends
• what should happen if the one of the relationship partners dies

The recent Supreme Court decisions make one thing clear: old, generic agreements are no longer enough. Thoughtful drafting is required, especially where trusts, pre-relationship assets, children from previous relationships, or unconventional living arrangements are involved.

When to seek advice

Most people only seek advice once something has already shifted — moving in together, buying property, or merging finances. These are precisely the moments when good advice can prevent stress later.

Common triggers include:
• “We’re thinking about buying together.”
• “I own my house already — does that change anything?”
• “Does my trust still work the way I think it does?”
• “We keep separate finances — does that matter?”
• “Our relationship is non-traditional — how does the law view it?”

If you’re asking these questions, you’re at the perfect stage to get clarity.