Wellington Lawyers: How to Protect Family Inheritances from Relationship Property Claims in NZ

WELLINGTON, New Zealand - May 19, 2025 - PRLog -- One of the most common concerns for parents and grandparents updating their Wills is ensuring that their children's and grandchildren's inheritance (https://corelegal.co.nz/) remains protected—particularly from relationship property (https://corelegal.co.nz/) claims. With divorce rates in New Zealand increasing and marriage rates declining significantly since the 1970s, it's no wonder this issue is front of mind for many.

At Core Legal (https://corelegal.co.nz/), based in Masterton (https://corelegal.co.nz/) and Wellington (https://corelegal.co.nz/), we regularly assist clients in safeguarding their family's wealth from unintended claims or complications under the Property (Relationships) (https://corelegal.co.nz/) Act 1976. Here's what you need to know about protecting your legacy.

💼 Inheritance (https://corelegal.co.nz/) and Relationship (https://corelegal.co.nz/) Property Law in New Zealand

Under current law, inheritances (https://corelegal.co.nz/) are generally classified as separate property. This means they aren't automatically included in the pool of assets divided in a divorce, civil union separation, or end of a de facto relationship.

However, things can quickly change. If your loved one:

• Deposits inherited money into a joint account,
• Uses an inherited property as the family home, or
• Shares use of inherited items like vehicles or art,

…those assets can lose their separate property status and become relationship property, potentially halving your intended gift in the event of a separation.

Even if a person is single when they receive their inheritance, it can later be subject to claims once they enter into a qualifying relationship—particularly if they co-mingle that inheritance with shared assets.

🔒 How to Protect Inheritances (https://corelegal.co.nz/) from Relationship Property (https://corelegal.co.nz/) Claims

1. Contracting Out (https://corelegal.co.nz/) Agreements (https://corelegal.co.nz/) (Pre-Nups (https://corelegal.co.nz/))

Your loved ones can enter into a Contracting Out Agreement (https://corelegal.co.nz/) under the Property (https://corelegal.co.nz/) (Relationships (https://corelegal.co.nz/)) Act. This legal document clearly defines what remains separate property, including inheritances and family heirlooms. While this method is highly effective, it requires the consent and cooperation of both partners—something not always within your control as the Will-maker.

2. Family Trusts (https://corelegal.co.nz/)

A Family Trust (https://corelegal.co.nz/) can provide greater protection. If the trust names only your children or grandchildren as beneficiaries (excluding their partners), and distributions are carefully managed, inheritances (https://corelegal.co.nz/) can be shielded from future claims.

That said, trust administration has become more complex and costly following recent updates to the Trusts (https://corelegal.co.nz/) Act 2019. Trusts remain a powerful tool but are most suitable for larger estates (https://corelegal.co.nz/) or more complex family (https://corelegal.co.nz/) dynamics. https://www.corelegal.co.nz