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The Honest Truth About Buying Property With Someone You Love. · The Curve

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Today's property episode is with Holly, who may sound and look familiar.
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She's been on the podcast
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before.
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Last month, we spoke to her about the first time she bought property with a partner
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and what went horribly wrong.
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And when I say horribly wrong, I'm not even exaggerating.
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If you haven't listened to this episode, do yourself a favor and go back and listen.
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However, part two today, you can listen to this if you haven't listened to the first,
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but it is all about her second property purchase.
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What happened?
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What did she learn?
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And what did
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she implement after round one?
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What did she do differently?
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And what did she learn about prenups,
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estate planning, wills, et cetera?
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Because while a lot of us don't want to think about worst case
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scenario, you actually have to.
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And one of the things Holly said in this conversation was
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everything ends.
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And it was such a penny drop moment for me because it's really sad to think
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about, especially when things are going well.
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Relationships, jobs, businesses, everything
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eventually ends.
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It's just the way that life works.
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And when you haven't thought about what
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could happen at that point in time when it ends, whether it's by choice, whether you're forced into
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it, there's so many things that can happen.
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This is a really important conversation to just remember
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that when you're thinking about property, buying, investing with anyone, whether it's a partner or
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someone else what are those steps and what do you have in place if it's not roses and rainbows
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forever and ever which we all know is not going to always be the case so this is a really great
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conversation and yeah we'd love to hear what you think of it please rate or review wherever you're
1:35
listening and if you're listening and you think oh my goodness I need to speak to an expert whether
1:40
it's about prenups estate planning anything like that we will put a link to the curve recommends
1:45
experts in the podcast show notes.
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Welcome to another episode of the property podcast.
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I am loving this series.
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It's so fun to be able to talk about a different asset class.
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I mean,
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it's been years that we've spoken about the stock market.
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So to be able to really dive into property,
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I'm loving.
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We just wanted to share a message from our partners, BNZ, who know that home ownership
2:08
is not a straight line.
2:09
Sometimes life just does throw you curveballs and there's actually nothing
2:12
you can do about it.
2:14
You just have to remember that they're all about supporting you through
2:16
the hard stuff, not just the highlights.
2:18
So if you are in a position where you're having a total
2:21
meltdown or something's not going to plan, just remember that the sooner that you talk to the
2:25
bank, the more options that you will have.
2:27
And it is never too late, no matter how dire things feel,
2:30
to reach out.
2:31
They are always there to help and not judge.
2:33
So whether you're at the start of your
2:34
journey or you're rebuilding, whatever has gone wrong, remember that BNZ has got the tools and
2:39
the people and they're ready to help you find a way.
2:42
Thank you so much to BNZ for empowering
2:44
this podcast and let's get into it.
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Oh my God, Holly, welcome back.
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This is the first time I
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think we've done such a swift part two with someone.
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You had a second property purchase
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with a partner, which people listening might think, surely not.
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Surely not.
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Surely she didn't
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do round two.
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I would love to start there.
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Take us back.
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What did you buy?
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Who was it with?
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How
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long had you been together?
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And yeah, did you go into it with a different frame of mind?
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Yeah, definitely a different frame of mind.
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And I know a lot of people were like, surely not.
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Did
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you not learn your lesson?
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I think I did.
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I went into this a lot more aware.
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I mean, I think I know
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every detail there could be when it comes to buying a property through my experience.
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I did
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do round two with a partner.
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We've been together maybe three years by the time that we did this.
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To be fair, actually, we put the deposit on a section quite early into our relationship
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and just thought, you know, why not?
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We're both sort of in a position
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two.
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How old were you at the time?
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Like maybe 27-ish.
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Okay.
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So still quite young though.
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Yeah.
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And it was early on when we put the deposit down on the section as well.
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So in New Zealand,
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You can buy land before it's actually a piece of land.
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So it's the subdivision phase, which is really common in central Otago, which is where I
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purchased.
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The developer releases development ahead of plans.
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You look at a plan and you can put a deposit down on a section and then you settle when
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the title issues, which we started probably two years before we did it.
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And we would have settled in 2024, but we would have probably put the money down in
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the section maybe 2023 then.
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I might have been 2022 because it was around the time where property was sort of sitting at a really good point.
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It had gone up a lot in value in central Otago.
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A lot of people had put money on sections back then.
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And then by the time title came around, they were actually able to sell the sections for a substantial profit.
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So a lot of people actually went through in that couple of year period where they put a 5% or 10% deposit down.
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And then by the time title came, they actually onsold the section and had made over.
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Like I had plenty of clients who did this who made over 100K.
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Yeah.
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Yeah.
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Yeah.
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Who even knew you could do that?
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I didn't even know that that was a thing.
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So we started around that time, but I was also very aware that that doesn't always
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go up.
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And when my partner and I went into this, we were like, okay, as long as we can ride the
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wave, because there's actually no guarantee that this is going to go up in value like it had been
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in the last couple of years.
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And to be fair, by the time we actually settled on our sections,
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the property had dropped, like the land value had dropped.
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I think our section was $500,
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thousand for the section and then by the time two years later it came to title issuing
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we were about a 600 square meter section other sections that were like 800 you know which were
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originally listed like 700 000 we're now getting sold at 500 000 and ours were probably going
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yeah so you but I think it's important to be aware and talk about that you know so many people went
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into it at that time and I had clients and people who went in with a mindset going oh I'll be able
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to sell it and you know you always warn and say well actually you're not guaranteed to sell that
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land at a profit like yes that's happened in the last couple of years but that's not guaranteed
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to continue you have to go in knowing this is the price you know can you viably do it I really think
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that's an important point to stop on because I've now bought two investment properties and
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I haven't for a second thought about the idea of losing money on them and I don't know if this is
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specific to New Zealand or if this is a global approach to property.
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But for a really long time,
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property and land went up and up and up and up and up.
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And for the first time, really,
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probably since we've both been alive, things are starting to look a bit dicier.
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And I still,
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even though I know that, in the back of my head, I still think, oh, that's not going to happen to
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me.
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There's no way that this would go down.
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It's so odd.
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I don't know what the trust in the asset
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is or where it comes from but it it is true like yeah your land or your property could go down and
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and that's something we don't talk about a lot no and we like I've had clients sell at a loss but
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they were in a position where they had to sell and I think that's the thing is there might be a way
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if we saw lots of people in Auckland who have sold at a loss in the last couple of years because
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they brought in that peak but they had to sell and I think that's the thing is we went in with
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the mindset of can we do this together and can we ride a wave so if there is a dip or whatever
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we'll be able to service that and we're not going to be in a position where we've
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overcommitted and we're going to be forced to sell and we could actually lose our savings our
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you know house deposits that we've actually put in so it's actually a good point you bring up
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because it's really similar to stocks because stocks go down all the time right it's so normal
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but if you're in a position where you have your emergency fund for example invest in the stock
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market and you need a root canal not ideal because you're forced to sell and I think
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it's just keeping in mind that same can I a afford it and be whoever I'm going in with do we have the
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same mentality of hold hold hold and we don't need this for a really long period of time so that
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if the market is down you're not in a position where you have to sell and I think that's a really
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important point definitely so I we went in with that mindset which I think was really smart so
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that was like maybe let's just go 2022 when we put the deposit down and we were like okay this
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is going to issue around 2024 and we're going to build that was our plan and we were really
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onto it this time around I think I'd learned a lot of lessons so what we actually did is we
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priced it all up we locked everything in before starting and that's something I would absolutely
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recommend just from last experience and pricing and clarity and all those things and knowing what
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you're in for I was really set on going with a fixed price build contract and I also know from
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reality when it comes to building, when title issues, getting your build contracts order,
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getting consent, getting all of that, that can take four months plus.
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So I was like, let's get
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all of this done pre-title issuing so that when our title issues, we can start building straight
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away, that we're not just sitting on empty land for the next four to five months while we're paying
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rent and also servicing our land alone.
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So prior to the title issuing, we had all the contracts,
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We ended up going with a local company.
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We locked in everything we wanted.
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We locked in, you know, the paint colors, the ovens, the door handles, every single
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thing before starting, which I went in very clear so that when it come to the build, there
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were no alterations.
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There were no price adjustments.
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We sort of just sat down in one or two sessions and just locked it all in.
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I did kind of take an investment property strategy to this house this time.
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I wasn't emotionally involved.
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It wasn't an investment property.
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it was definitely like a home that we were intending to live in but I was like it won't be
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you know a home that you're in for the next probably 10 years let's be realistic in terms
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of where we were at in life and we also went in with a mindset of how can we make an income from
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this rather than just living in it and having to service that alone so we did a three bedroom two
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bathroom house but we also did a one bedroom apartment attached but like separate so that
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you could have an income and have flatmates but not have flatmates.
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That's so clever.
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Yeah.
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We had a beautiful home for ourself and then we had a completely separate,
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self-contained one-bedroom apartment, essentially, like full kitchen,
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separate bathroom, massive bedroom, double wardrobe, separate living,
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and designed it quite well from the beginning to be able to do that.
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You obviously, going into the second property, had been quite horrendously burnt
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and had a pretty traumatic, I know that that's an overused word, but I would say that's valid
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experience when it comes to property and buying with a partner.
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How or what did you do differently in this scenario?
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Did you put things in writing?
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Who paid for what?
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Was it 50-50?
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Can you just give us an overview for the setup between you
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and your partner and what you did differently to the first property?
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Yeah.
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So we went in with
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different deposit.
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I think I put in almost, you know, 100k more than they did, which is every
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lawyer would tell you at that point you need a contracting out agreement.
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All the lawyers around
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me told me you needed a contracting out agreement.
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And I was in a position where I'd gone through
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what I'd gone through and I just, I didn't care at that point.
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This person, they said, you know,
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if it doesn't work out, you know, you take your deposit, I'll take my deposit and we can split
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the rest.
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And I went into it going, that's fine.
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I know people can say that all the time.
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It doesn't
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mean it's going to have any sort of standing so sorry you went into it knowing that if it all
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turned to custard you knew that he could turn around and be like no I'm taking 50 50 of everything
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but you you just decided I'm weighing up the risks here I'm actually fine with that so I'm yeah I'm
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so surprised by that especially because you spent so long fighting in court for property one what
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was going through your head and how did you land on that I think given the value I and the cost of
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fighting over and all those types of things I didn't care you know at the end of the day it
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would have been about 50 grand because I would have got if I put in 100 extra it's half of that
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I'm still going to get my half back so it's about 50 grand at the end of the day and I thought
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do I really want to go put all of this in place for about 50 grand and I didn't I didn't want to
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do the contract to yard agreement and I also couldn't have done the build without him you know
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he without him I couldn't have done that alone so I was like if he wants to do that at the end
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and it doesn't all work out, then that's the position I'm in.
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That's the risk I'm willing to take.
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And I think from what I went through, I just didn't have the fight in me.
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I just genuinely didn't care.
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By that point, I'd realized I'd rather put my efforts into making money myself
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other ways than sitting there worrying about 50 grand at the end of the day.
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It's an educated decision.
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You weren't going into it without thinking about worst-case scenario.
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You thought about it and decided, I'm actually fine with that.
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And I know I could live with it and not, it wouldn't eat me up.
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In terms of how you then structured the lending or whose name everything was in, was that
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50-50?
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Was it in your name?
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How did you deal with that?
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Yeah, everything was joint.
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So both names were on all the loan agreements.
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We approached it 50-50, like you pay your portion, I'll pay my portion.
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Outside of the deposits, everything was 50-50.
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Our repayments would approach 50-50, our contributions around the house and everything like that.
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Meetings, everything together, making sure that we're both on that same page.
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were you nervous to do this again how did you feel buying with someone else again
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after you know it's not that long later maybe a few years or maybe is that where your mindset
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of thinking about it more as an investment came from yeah I think I wonder if that did contribute
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to it a little bit is thinking of it like that going I know things end I and I actually had
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this conversation with a client the other day and I said you know they were talking about
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a business and things like that and I said I actually genuinely do and it's probably not nice
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but I do go into everything and going how does this end because that is the reality of life like
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everything has to end at some point whether it's by choice or not like everything does have to end
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you know whether it be a relationship whether it be a job whether it be a business venture like
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everything does come to an end at some point oh that makes me so sad I know you're right but god
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it's like right because obviously when things are really bad you're it's so it's such a relief to
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here don't worry everything ends but when things are good it's kind of sad and awful to think
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it is true yeah and that's where you would have made the most of it like when you're in it and
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it's good like ride that wave because I think that's the reality is anything can end tomorrow
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and I mean that's my whole job and what I spend every day talking about to people is we don't
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know what tomorrow brings and sometimes the end isn't you know leaving a relationship by choice
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it's something happened to that person and they've passed away or something like that you know
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so like everything does have to end at some point and so that's where I think if you can go in going
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okay what does the end look like whether it be by choice or but not and you've got that understanding
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it makes the whole process so much easier the amount of people I speak to in business together
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and I say you know what happens if one of you passes away and you know this relationship dynamic
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ends and they all go I don't know I'm like you need to know your exit plan and I think that's
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just because of what I've been through in the career I've been in.
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I do go in, you know, going, what does this look like if it ends?
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And then if you're clear on that, I think it always makes it a bit easier for whatever happens.
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It's a very good place to ask the question.
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So how did this relationship play out and how did the property play out?
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So we did the deposit and we started the build.
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It was really hard because I think when you do build a home with somebody,
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it also impacts things and it does that makes things make it harder to end things if you're
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it's not right it's not as simple as just walking away you know you've got financial ties to this
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person and that plays on your mind and I think a lot of people can stay stuck in relationships I
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think you know it can be really hard to leave relationships and that's something I've seen
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and had conversations about with so many of my friends in their late 20s early 30s
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had been in relationships of four or five years and going I actually don't know if I want to spend
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the rest of my life with this person but I feel like so many of us really struggle to leave
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relationships and I was probably in that position where we just built this house together we're
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about to move in and I don't think it had been good for a long you know a while and I was really
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struggling but that also played a big factor into me staying probably longer than I should have and
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I remember actually having a conversation with my girlfriend so spoiler alert obviously the
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relationship didn't work out for this time around again but yeah so and I remember having a
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conversation and you know talking to her about you know how I was feeling and she sort of said
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you know why wouldn't you and I said oh the house you know we have this house together we've just
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moved in and and she's like you didn't say you know you love them and all of these things you're
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going you know one of the things that's holding you back leaving is this house that you have
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together and I was like that's really sad so that relationship obviously ended we still actually
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own the house together I'm very fortunate that we have had an amicable separation from that
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perspective I'm very fortunate that he's agreeable at this stage to say you take your deposit I'll
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take mine whatever we sell it for we'll split the rest 50 50 but we did have to go to him through a
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period again like the other one where you figure things out I was very fortunate we actually had
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a separate house apartment so we didn't actually have to share a house thank god yeah um so didn't
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have to do that but we did live right next door to each other which was also probably not the
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healthiest dynamic you just really need space far out that would be so hard in any situation to be
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you know always seeing someone leaving the house to go to the gym will i bump into him going on a
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date anything it's it's just not ideal when it's so close to home far too close to home would not
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recommend but also that's the reality of so many people actually had a conversation about this
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literally in the weekend with my girlfriends about how people who are fortunate enough maybe to have
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family homes they can go to after a breakup or like a situation where they can just go and have
17:58
that breathing space you know I know a lot of my myself my girlfriends we didn't have those
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positions where we could just go stay with your parents or stay at a friend's or something like
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that where you can have that breathing time to figure it all out while not having to worry about
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your rates and your loan repayments and all of those things so I was fortunate this time around
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where we did at least have the separation slightly by a tiny fence you know you are still right next
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door to each other so it's not a huge separation but it was better than still being under the same
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roof but that's the reality of so many people when they do separate in New Zealand and as they're
18:31
stuck until they can figure it out and I saw that so many with my clients who are separating and
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that can be a manipulation tactic as well when people go to leave like it's so sad that so many
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people can use housing and finances as a manipulation tactic in relationships.
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In our
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case, fortunate enough, we rode out the wave a little bit and then it was time for me to exit.
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I couldn't live next door for another day longer.
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So I left, we had a conversation,
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he wanted to stay because I said the bull's in his court really, like I didn't really
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care about what we did.
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So we sat down and had the hard conversations, did all the numbers,
19:04
figured it all out.
19:05
And yeah, we've agreed that he's still in the house if we got the right price
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and somebody approached us, sure we'll sell, but we're not desperate to sell or putting it on the
19:13
market or anything like that.
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So for now we're treating it like an investment property.
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We will
19:18
sell it eventually.
19:19
When that happens, I'm not sure at this stage.
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I genuinely look at it like
19:22
an investment property with a friend.
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Okay.
19:24
Love this.
19:25
Love this.
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And now I would like to talk
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about the juicy stuff.
19:28
The elephant in the room here is now for a job, what you do is help people
19:31
with contracting out agreements, AKA prenups, and speak to a lot of people about how they can
19:39
protect themselves, the person they're with, the assets that they've bought, etc.
19:45
And do it in a
19:45
way that's not combative or stressful or a big deal, really.
19:51
You didn't do a prenup in the first
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one, obviously, you were really young and didn't really, you know, wasn't even something you
19:57
thought about.
19:58
The second one you chose actively not to.
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But do you still feel really confident
20:01
about the idea of, I'm actually fine that I didn't do a contracting agreement for that?
20:05
And it feels
20:07
it feels like that was the right call and if I had a client and I was speaking to them about it
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I would understand the reason why they made that decision yeah I think for me my approach to money
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and my attitude around finances and things is very different now than what it was say two years ago
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and I think that's potentially as well that you know I do now work for myself and have my own
20:30
business and have the ability to make my own money.
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I'm not salaried.
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I think even back then
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for me, my view on 40 grand would have been very different than what it is probably right now.
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And I think that's because I'm in control of how I could make that money elsewhere now,
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rather than relying on an employer or a partner.
20:49
40 grand is not nothing.
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That's still a decent
20:53
investment or savings or something to go towards a house.
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And I'm not saying it's nothing,
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But I think on the scheme of things, knowing what I know, what I learned about money and that really first experience and learning money isn't everything.
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And if I lose 40 grand, I lose 40 grand.
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That is what it is.
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I don't think there is that many people that actually would be comfortable with saying that.
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I think a lot of the people I sit down with actually wouldn't be able to live with that.
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And I've seen a lot of people who say things but, you know, could go through an experience like that and they hold on to that for the rest of their life.
21:23
and I think if you're one of those people where that would actually stay with you for the rest
21:26
of your life then you know you absolutely need a prenup and you need to protect that and you know
21:31
you couldn't live with the decision that somebody said one thing and did another where I know
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the reality it's not just through my personal experience through what I've done and seen as
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a lawyer for 10 years you know I've seen so many people say something can do the other thing that
21:43
they said they'd never do so I'm very aware of that and I'm very at peace with that I think a
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lot of the people I sit down with probably don't have that view and mindset and majority of people
21:53
wouldn't be okay with that and that's totally okay that's why we have prenups that's why we
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have things to put in place but it is such a personal thing and that's where I think you know
22:03
sometimes we put an umbrella over prenups and say that is one size fits all approach and that
22:10
absolutely not because I think most people hear the word prenup and immediately think of
22:16
Hollywood billionaires.
22:17
One person has a huge amount of money and the other person doesn't,
22:20
and therefore there needs to be a prenup.
22:22
Could we just explain what a prenup is in really simple
22:25
terms?
22:26
How would you describe that to anyone who's in a relationship and perhaps doesn't have one or
22:33
has never thought about it?
22:34
So a prenup is literally just a contract between you and your
22:37
partner on your finances.
22:40
It's you deciding whatever arrangement you decide about your
22:43
finances.
22:44
If you don't have one in New Zealand, obviously you have a default one, our legislation.
22:48
So essentially everybody has a prenup.
22:50
It's just determined by, in New Zealand at least,
22:53
in most other countries, the government, unless you enter into a prenup where you freely get to
22:58
choose how your finances are going to be managed between yourself and your partner.
23:02
So I think the
23:03
reality is we should all look at it as we all have a prenup, which is written by the government,
23:07
unless you enter your own prenup and determine that between yourselves, because that's literally
23:11
how open it is.
23:12
I think that's an interesting way to look at it.
23:14
And I remember seeing a video
23:15
online with a woman explaining that and she was saying, you have a prenup, whether or not you
23:21
realize or chose it, who do you trust more, the government to decide what's best for you,
23:26
having no idea on everyone's personal situation, or you choosing what works for you and your
23:32
partner.
23:33
And that definitely landed with me.
23:35
So I think the first place to start for anybody who
23:38
hasn't actively gone to a lawyer or decided to get one, look at where you live, what is the law,
23:45
and start there.
23:46
Because then at least you know technically what your prenup is.
23:49
Yeah, so many people don't.
23:51
So many people have no idea what that prenup position is.
23:55
Why do you think they're still so taboo if there is one technically put in place by the government
24:01
for everyone, no matter where you live?
24:04
Why do you think it still is?
24:06
And who would you say that
24:08
that taboo or that issue with talking about it, putting them in place is actually hurting the
24:12
most?
24:13
I think in society, in reality now, we all still really struggle to talk about money.
24:18
I think
24:19
that's also the whole idea about prenups is people haven't had those conversations.
24:23
I don't know why,
24:24
but I feel like there's shame around it or there is that whole old view of that one person's super
24:31
wealthy and we're locking out the other person because we think that in it for financial reasons.
24:37
And I think that's the attitude of prenups is, oh, we need a prenup because that whole
24:41
gold digger term, you know, they're here for the money.
24:44
And if they don't sign a prenup, that's just confirmation of it, which is just so not true.
24:48
But I feel like nobody talks about it.
24:49
So we haven't normalized the conversation yet to say they are normal just as talking
24:54
about money is.
24:54
And the more we talk about it, the more educated we are and the better choices that we can
24:57
all make because we've got access to the information.
25:00
So I think that's the reality of a prenup is it's literally a blank slate.
25:03
So it isn't what's yours is yours, what's mine isn't mine.
25:06
Well, it can be.
25:06
if that's what you want to make it, you absolutely can do that.
25:09
But also it could be, okay, we're
25:11
going into this house.
25:12
I just want to protect my house deposit, your house deposit, everything else
25:15
we might be okay with.
25:16
And you're like, perfect.
25:17
Or it might be, we've met in a position in life,
25:21
I already own a house.
25:22
I already have this amount invested.
25:25
I've built all of these assets prior to
25:27
you.
25:27
I'm just going to protect the value of that.
25:29
And then whatever we build together, if that is
25:31
your approach and you want to take a joint venture from then forward, you go, okay, well, I'm
25:36
ring fence and protecting what I had prior to you but whatever we build together is ours and
25:41
our relationship but I have the certainty that if for whatever reason because life happens we you
25:47
know none of us genuinely have intentions of breaking up some with somebody when you first
25:51
start but life happens if we do go our separate ways for whatever reason and not even by choice
25:56
like that's the thing as well in New Zealand if you one partner leaves children can make a claim
26:01
for a 50-50 division so claim that relationship property position on somebody's passing so when
26:07
somebody dies which a lot of people don't realize as well so it can give your partner protection
26:11
in the event that you pass away while in this relationship their children or their you know
26:18
can't come and make a claim for half of the assets relationship property assets which you know I have
26:24
a lot of conversations with people like that um without putting it in place you know if they
26:28
separate it's going to serve a purpose but if they pass away it's also protecting what their
26:32
arrangement is regarding their finances so their children can't challenge it and ask for a 50-50
26:37
division of you know relationship properties so is that the idea that say my parents were in a
26:42
relationship and then it ended like so for example say my mum was in a relationship with someone else
26:46
and they'd combined finances and then she died yeah his kids can't come and say I want 50-50 of
26:55
her stuff too.
26:56
Yeah, because they would combine the pool.
26:58
So if you, let's say your mum
27:00
owns a house outright, right?
27:02
And then she enters into a new relationship with a partner.
27:05
He actually doesn't have any assets.
27:06
They live together.
27:07
They have the enjoyment.
27:08
She's like,
27:08
look, we're happy.
27:10
He goes, this is your house.
27:12
But they carry on the relationship,
27:14
do things together.
27:15
And he always says to her, I'll never touch your house.
27:18
I'll never touch
27:18
your house.
27:18
And if she said, I want to put that in writing in a prenup and he says no,
27:23
then if she chooses to continue that relationship and they spend their time together let's fast
27:27
say fast forward 10 years later she let's say you know the house was debt free by the time he met
27:31
her so she had say like a million dollar home your mum passes away and she leaves him nothing
27:36
in the world let's just say she's like you know you're an adult you know we lived separate lives
27:40
financially they can go oh no actually we'll make a claim under New Zealand relationship properties
27:46
law for a 50 50 division of relationship property so we're going to challenge the will
27:50
and elite for 50-50 division of relationship property.
27:52
So looking at that, they'll go, okay,
27:54
what's dad's assets?
27:55
Let's say he had like 50 grand sitting there, but your mom had a million
27:58
dollar debt-free house.
27:59
Perfect.
27:59
Let's combine that and we'll take 50%.
28:01
So dad's estate will get
28:02
50% of your combined relationship property pool.
28:07
And now all of a sudden his value asset base went
28:10
from 50K to 500K.
28:13
So this is absolutely crazy that this is the example you use, because I actually
28:16
have got permission to share this so my mum was in exactly that position like exactly what you
28:21
described except obviously she's still alive thank god but she presented a prenup for exactly that
28:28
reason because she didn't want us as her kids to be in business with her partner if she died
28:36
she was like that's not fair on my kids so this is what I want to put in place and he refused to
28:39
sign it so she asked him to sign it eight months before the relationship ended and it was just
28:45
sort of dragging on and on and on and she basically had to make the decision to end the relationship
28:51
because he just wasn't willing to sign it and they broke up because she just said well if you if you
28:57
can't let me protect my assets for for my children then we can't be in this relationship because he
29:05
wanted to be able to live in the house until he died if she died he wanted to have access to that
29:09
and she said but that's not fair on my kids because that's my asset and I want to be able to
29:14
pass that value on to them so you could have two years in the house but not not your whole life
29:19
and it was really scary because the timing of her buying this property they didn't have a prenup in
29:27
place so she had to basically there was a time pressure on when he needed to sign it by otherwise
29:32
it was going to become relationship property and he was just delaying delaying delaying wouldn't
29:36
sign it and then she ended up having to say fine law we're separating because I'm settling on this
29:41
property and I'm not going to risk that.
29:44
Isn't that crazy?
29:47
So brave like because that's literally
29:49
what you're saying yeah to be like but for this agreement I because that's the whole point of it
29:53
and that's what you're arguing in court is but for this agreement I would have walked away and
29:57
your mum's like the prime example of well if you're not going to sign it I will walk away
30:01
because I want that certainty although he wasn't even saying that he would honour her wishes he's
30:06
going no I want and that's just what fascinates me and I think that's interesting about people
30:10
you know somebody you know I don't know how long they've been together and all those types of
30:13
things but sitting there going oh no I want the right to stay in this and it's like really like
30:18
what gives you that right and that entitlement and I think your mom's being super generous by
30:22
saying look I'm not going to kick you out you know if something happens to me tomorrow like
30:25
I would give you two years or whatever it may be but at the end of the day this is an asset I owned
30:30
prior to you and I want it to go to my children what why would that be wrong but and I did yeah
30:35
I think that's so brave.
30:36
I've seen quite a few women do that.
30:39
I just honestly, because she definitely didn't know that or go into every situation with a partner with the same mentality.
30:46
But I think, you know, she had also had experiences where she got burnt by not protecting herself and just refused to let it happen again.
30:54
And I thought, shit, yeah.
30:56
I was so proud of her.
30:57
I was also so worried at the time that it wasn't being signed.
31:01
Have you seen this happen a lot?
31:03
Yeah.
31:03
Like, have you seen this happen where you've got clients who don't really want to have the conversation, they do, and then it sort of reveals, oh, God, okay, this person is really not in it for the right reasons and I'm going to have to make a hard decision?
31:16
Like, is that common?
31:18
Common.
31:19
Maybe not super common.
31:21
Like, it does happen.
31:22
Like, there's one example screaming in my head, and I just think this woman was so brave.
31:26
She had an incredible job.
31:29
Like, she was the breadwinner between the two of them.
31:32
they were on the cusp of the entitlement time frame they just brought her well she brought
31:36
the house because it was all her money she was the earner out of the two of them so it was all
31:41
lent to her like she had the sole risk in terms of the lending and everything she'd just given
31:45
birth to twin babies and she asked like with her partner asked him to sign a prenup and he refused
31:51
and she left and I went you are so brave like you literally have babies like babies like months old
31:59
babies and you have chosen to exit this relationship who like every you would completely
32:04
understand not wanting to do that alone but yeah he refused to sign and she went well I'm out and
32:10
so she and she left and I was just like wow kudos to her because that is a really tough position to
32:17
be in to saying I'm actually going to do this alone and I have like babies that are like two
32:21
or three months old and I've just exited a relationship because we've tried to have this
32:25
conversation they're flat out refused wow oh my god and that's why you have the conversation before
32:30
you have kids ideally yeah and even in the weekend I actually chatted to someone who they she's you
32:36
know in a relationship they've got assets together and she's about to receive like a million dollars
32:39
in inheritance and I sort of was we were talking through options in terms of the best way to
32:44
protect it and structure it and hers was not so much she didn't want to exclude her husband from
32:48
having the benefit of it but she didn't want to they're at an age where she's like if something
32:52
happens to me you know in the next couple of years he could have 30 years with somebody else
32:56
and she's like I don't want to prevent that but I don't want that person to be able to have half of
33:03
my my family's inheritance I want that protected for my children so we were talking through options
33:08
in terms of ways she can give her husband the benefit during his lifetime but making sure it
33:13
doesn't become subject to relationship property laws so if he is in a relationship with somebody
33:17
us for the next 10, 20, 30 years, whatever it may be, that that person doesn't end up
33:22
having an entitlement.
33:24
Anyway, she brought that conversation up and she was shocked because it wasn't maybe as
33:27
well received as what she thought it would have been.
33:29
Oh, wow.
33:30
So even you can, yeah, you can be with people for, you know, 20 years plus and then have
33:35
these conversations because somebody's coming into inheritance now, which is maybe the reason
33:39
that you do want the prenup because everything else might be, well, that's all been together.
33:44
We've built it together and all those types of things.
33:46
but actually this inheritance we haven't built together.
33:48
And I do want to protect it in the event, you know, we separate,
33:52
but also in the event that something happens to me, a new repartner,
33:55
I want that actually going to my children,
33:57
not the new partner and their family and things.
34:00
I guess, how can we think about this a bit more zoomed out?
34:04
What, say someone goes into a relationship,
34:07
then they don't have kids, they're not married,
34:09
or they're married and they don't have kids,
34:11
or they have kids and they're not married.
34:12
You know, like there's so many different situations
34:15
and things evolve constantly how fluid can prenups be and what yeah what what is like the recommended
34:23
time frame or how do you approach them is it is it that if something changes you revisit what
34:28
you've put in place and see if it still stands and is relevant yeah I think that's the thing so
34:33
prenups are like essentially an indefinite contract so what you're agreeing to you're
34:38
saying you're agreeing to this for the the future like some of them have like a review clause in
34:43
them it's a waste of time they're not enforceable it doesn't mean anything um so anyone putting it
34:47
in it is just a waste of time um but you can challenge them if they're considered seriously
34:52
unjust so that's like there's been a serious change of circumstances um that would make that
34:58
con that contract i think it's like repugnant to justice is the term that they use and what does
35:02
that mean i mean that's open to interpretation and case law and thousands and hundreds of thousands
35:07
and legal fees but like an example it could be you know you enter into this contracting
35:11
out agreement you have a really strict position like what's yours is yours what's mine is mine
35:14
and then you go on to have like three kids together somebody sacrifices their career
35:18
has no income you know you that you know you stay at home and they may say let's say the
35:22
contracting out agreement or the advice going into this didn't touch on that position and now
35:27
let's say the woman you know is 30 years down the track and she you know gave up 15 years of her
35:32
career her earning potential her kiwi saver all those types of positions nobody had that
35:37
conversation with her when she went into this prenup and it was like so strict that it locked
35:41
and quite likely she's going to be able to have a successful challenge on something like that.
35:45
But if you had advice on that as well, to say that would be successful wouldn't be as easy
35:51
because if somebody said to you, well, this wouldn't be fair if you sacrifice and you do this
35:56
and they said, oh, I'm okay with that and I'm proceeding anyway.
35:59
If you've given the advice and somebody wants to proceed, there's not a lot you can do about it.
36:03
But if you hadn't had the advice and if you're getting that advice,
36:06
I'd be very surprised if you are wanting to proceed
36:09
because that can leave somebody in a really vulnerable position.
36:11
But often you can do things like this is our position
36:14
and you have a trigger date.
36:16
Because what can change your circumstances?
36:19
If you're both independent and both financially capable
36:22
and somebody isn't sacrificing,
36:23
then what's wrong with the contract staying as it is?
36:26
It is what you agreed and why should that change?
36:29
Realistically, it's only changing when there is a change of circumstances
36:32
and that's where I always say to people,
36:34
before you go have this kid with somebody
36:35
or before you give up your career to start supporting theirs or before you impact yourself
36:40
financially if you do have a prenup in place before you say yes to any of those that's when
36:44
you stop and go actually our prenup hasn't accounted for this I'm not going to have a child
36:51
or give up my career or start doing this to support you unless we actually get this agreement altered
36:57
and what that alteration looks like who knows you deal with it then and when you're at that time
37:02
but it's being aware that you have this contract in place and before you just go sacrifice your
37:08
position financially for someone else you revisit and if they're not willing to revisit that's when
37:13
you go am I willing to sacrifice myself financially if they're not willing to change what that
37:18
position is going to be I think that's always a really good approach to take or when you're
37:24
drafting them quite often we do for especially like young couples who haven't had kids and things
37:29
like that there's a trigger point and it's like what your equity is up until the point that your
37:34
financial position is going to change because somebody is going to have to have to sacrifice
37:38
because you're having a family or doing whatever we call it a trigger date and at that point the
37:42
values ring fenced but then beyond that you're what you earn and your kiwi saver and things like
37:47
that becomes relationship property so that you've got protection up until your financial position
37:52
changed but at the point your financial position changed so has your contract and what you actually
37:56
agreed to god there's so much in this isn't there so much i wanted to talk today we've had a couple
38:02
of um really interesting stories come in from the community about themselves or people they know
38:09
and what happened and i really wanted to unpack each of them and talk about what they could have
38:13
done differently or how they could have thought about it but i honestly think we might need to
38:18
do a part three i'm like i've still got so many questions and so many things that i wanted to
38:22
talk about but I'm just aware of time I wonder if in a next episode what we could do is because
38:27
there's so many things I want to talk about particularly around why the 50-50 split isn't
38:31
always fair often for women some of the things that you've spoken about in the first episode
38:37
where yeah you basically said that the reason that that actually is not maybe appears up front to be
38:44
fair but in the long term isn't like there's a lot of things I'd love to talk about but
38:48
I'm wondering if we do a part three and I link in the podcast show notes for anyone who's listened
38:54
maybe they're in the middle of a situation by the way saying I realize we're not giving actual
38:58
advice but essentially if you're in a position where something's going on for you and you don't
39:03
really know how to navigate it or you'd like to use it as an example we'll keep it really anonymous
39:09
I'm sure most people want that to be anonymous whether you've gone through it or not but I'll
39:13
link that in the show notes because I do think talking about other situations you always learn
39:17
something like even what I was saying about my mum or you were saying about the person you spoke
39:22
to who's getting inheritance the more that you get examples for things the more that it then
39:26
triggers you to think if you're in that situation how you should or shouldn't think about it and
39:31
the same for you and your first property purchase then in the second one weighing up how you wanted
39:36
to approach it and making an educated decision so I think if there's anyone that is listening
39:40
that feels comfortable sharing we would love to hear your story and then yeah let's almost do like
39:46
a curveball episode because we haven't done one of these in ages but it's quite fun so it's like
39:51
what's the curveball you may have already gone through it and it's more just talking about it
39:54
but you may be in the middle of something quite curly happening and we could give some yeah have
39:58
some interesting conversations around how they could think about it but for anyone as well that
40:04
wants to get in touch with you directly Holly can you just give an overview as to what succession
40:09
is and how they could get in touch yeah so to be fair I am sitting here talking a lot about
40:14
relationship property.
40:15
I don't do prenups anymore, to be honest.
40:18
I've stopped that,
40:19
but I have amazing contacts and referrals who I trust implacably, but it all comes into,
40:25
so I do now do estate planning.
40:27
So wills, enduring powers of attorney, trust formations,
40:30
and trust formations are also really good for asset protection.
40:33
Oh my God, we haven't talked about this.
40:35
We haven't talked about this at all.
40:37
Yeah, no, but trust formations are also a really good asset protection strategy.
40:41
depending on timing you know so many people go oh trust the worthless these days and that's
40:46
absolutely not true but it all does come down to timing and where you are in a relationship and
40:50
things like that so I still deal with it to a certain degree but I don't do the prenup side
40:54
of things but I do have people that I refer that type of stuff to and that always comes up in
41:00
conversations when I'm sitting down with couples and we're talking about their wills and what
41:03
they're trying to achieve and I say well that's totally fine but to actually have this certain
41:07
for your respective children and positions, especially, you know, we talked about your
41:11
mum's situation, somebody making a claim, we actually need to have this structured this
41:15
way via contracting, you know, via prenup or we need this trust structure in place as
41:21
well.
41:21
So I now deal with, you know, wills.
41:24
We all need a will.
41:24
Unfortunately, we all have to pass away at some point.
41:27
Enduring powers of attorney, which is if you ever lose capacity and trust, which are your
41:32
asset protection structure.
41:33
but it is I'm succession succession.nz literally everywhere like Instagram TikTok website that type
41:39
of thing we actually have a code for someone who wants to come to you don't we yes we've got a
41:44
special code where you can get a discount to work with Holly so we'll put that in the show notes too
41:48
and then yeah oh my god fun let's do a part three I can't wait sorry I feel like we're just
41:54
all of a sudden turning into like you know a full-on podcast really um but I do think there's
41:59
just so much there's so much to talk about it's such an interesting conversation and I think
42:04
why not do one two three four five six seven eight um thank you so much Holly I love speaking to you
42:10
and um yeah thank you for sharing so openly again and what a great podcast very biased I realized
42:16
but I really loved that so thank you so much for your time thank you for having me did you
42:21
love this episode.
42:23
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