Does a family trust protect assets from a relationship property claim?

Partly. Genuine trust property is not owned by either partner, but the Act can compensate a partner where property was moved to a trust in a way that defeats their rights, and other claims can reach trust arrangements. A contracting out agreement alongside the trust is how couples put the treatment of the trust beyond argument.

Should the trust be disclosed in the prenup?

Yes, always. The agreement should acknowledge the trust, what it holds and how distributions are classified. Concealing a trust invites the agreement being set aside for serious injustice later, which defeats the purpose of both structures.

Do we need a trust if we have a prenup?

Not necessarily. A contracting out agreement on its own can classify and protect separate property between the partners. Trusts add protection against different risks, such as creditors, and serve estate planning goals. Which structures you need depends on what you are protecting and from what; take advice on the combination.

Prenups and family trusts

Updated 2026-08-09. General information, not legal advice.

A family trust and a prenup solve different problems, and in New Zealand, where family trusts are unusually common, many couples need both. A trust holds property outside personal ownership; a contracting out agreement sets the rules between the two of you for the property you do own, and for how the trust is treated in your relationship. Relying on a trust alone is a common and expensive mistake: relationship property law has several ways of reaching arrangements that use trusts unfairly, and an agreement is how you put the question beyond argument.

What does a trust protect, and what does it not?

Property genuinely owned by a trust is generally not relationship property, because it is not owned by either partner. But the protection has edges. Where relationship property has been disposed of to a trust in a way that defeats a partner's rights or entitlements, the Act lets a court order compensation. Where a couple's income and effort improve trust assets, claims can arise. And courts can in some circumstances reach trust arrangements connected to a marriage or relationship through other equitable and statutory routes. The stronger the appearance that the trust is really just one partner's pocket, the weaker the protection.

None of this makes trusts pointless; it makes them insufficient on their own for relationship property planning.

How a prenup and a trust work together

The agreement does the work the trust cannot: it records that both partners know about the trust, understand what it holds, and agree how trust-related benefits are classified. Typical clauses acknowledge the trust's existence and property, classify distributions a partner receives as that partner's separate property, agree how a home owned by the trust but lived in by the couple is treated, and confirm that neither partner will claim against the trust or its assets if the relationship ends.

Signed with full disclosure and independent advice, those clauses convert the trust's grey areas into agreed terms, which is precisely what a court respects. Concealing the trust does the opposite: agreements signed on incomplete disclosure are the easiest to set aside.

Common situations

Parents settling property on a trust for a child who is partnering: the trust plus a contracting out agreement is the standard belt and braces, and increasingly the parents' lawyers make the gift or loan conditional on the agreement existing. A couple living in a trust-owned house: the agreement should say what, if anything, either partner earns in that house's value over time. A business held in a trust: pair the trust with clauses about income drawn from the business and any increase in its value. In each case, see what to include in a prenup for the wider checklist.

Common questions

Does a family trust protect assets from a relationship property claim?: Partly. Genuine trust property is not owned by either partner, but the Act can compensate a partner where property was moved to a trust in a way that defeats their rights, and other claims can reach trust arrangements. A contracting out agreement alongside the trust is how couples put the treatment of the trust beyond argument.
Should the trust be disclosed in the prenup?: Yes, always. The agreement should acknowledge the trust, what it holds and how distributions are classified. Concealing a trust invites the agreement being set aside for serious injustice later, which defeats the purpose of both structures.
Do we need a trust if we have a prenup?: Not necessarily. A contracting out agreement on its own can classify and protect separate property between the partners. Trusts add protection against different risks, such as creditors, and serve estate planning goals. Which structures you need depends on what you are protecting and from what; take advice on the combination.

Thinking about a prenup?

The right order matters. Agree the big things together first, then each of you gets your own lawyer to advise on and certify the agreement. That second step is what makes it binding.

See how to get started

Sources

All information published on prenup.nz, including this guide, is general information only and is not to be construed as legal advice. We strongly recommend seeking independent legal advice about your own situation. A contracting out agreement only binds you once each partner has taken independent legal advice and a lawyer has witnessed and certified each signature, as section 21F of the Property (Relationships) Act 1976 requires.