This month Forbes released its annual list of the world's billionaires and Taylor Swift made her entry (Taylor’s Version) in what has been a good year for the world's richest people. 

Swift now has an estimated net worth of USD $1.1 billion. She joined the ranks of the world's wealthiest in October 2023 with the earnings from her Eras tour and the value of her music catalogue. Impressively, she is the first musician to accomplish this feat solely on the strength of her music and performances, without diversifying into other products or offerings. 

The woman does not rest on her laurels. In 2021 she began rerecording her first six albums to regain their ownership rights. The demand and hype surrounding her Eras tour (including a US leg that generated more than USD $700 million in ticket sales and the five continent, 80+ shows, international leg) overwhelmed Ticketmaster. Earlier this year an academic conference was held at the University of Melbourne exploring Swift’s influence across the intersection of music, economics, society and culture.  

On the non-business side of things 2023 saw Swift start a new relationship with Kansas City Chiefs tight end Travis Kelce. As a three-time Super Bowl champion Kelce is successful and well known in his own right, but being brought into the orbit of Swift’s fame and media scrutiny would likely have been a shock to anyone’s system. 

So, bearing in mind that one of the number one risks to wealth is relationship breakdown, what should a billionaire woman in her 30s be doing to safeguard herself at the start of a new relationship? Let’s assume for a minute that Swift and Kelce are Kiwis (Taylor, if you are reading this there are options available!) and work through some of the relevant considerations for two Lover(s) at the start of coupledom when they are both already established in their careers. I note that similar issues apply in many other jurisdictions around the world.

The property sharing regime

In New Zealand people in a de facto relationship (those who live together as a couple) for three years are generally subject to the equal sharing regime in the Property (Relationships) Act 1976 (‘PRA’). This presumes that each partner contributes equally to a relationship (financially or otherwise) and aims to provide an equal division of relationship property when a relationship ends. 

Determining whether two people live together as a couple, and when they began doing so, brings a raft of its own difficulties. Things like the duration of the relationship, the nature and extent of any common residence, whether a sexual relationship exists and the degree of financial dependence or interdependence can all be relevant. 

De facto couples who have been together for less than three years can still be subject to the PRA if: 

• there is a child of the relationship or the party seeking relief has made a substantial contribution to it; and
• a failure to make an order would result in serious injustice. 

In those circumstances the division of relationship property is determined in accordance with each party’s contribution to the relationship.

Under the PRA all property that a couple own is classified as relationship property or separate property. Relationship property is generally divided equally when a relationship ends while separate property is usually retained by the party to whom it belongs. The categories are mutually exclusive. Assets like the family home and chattels are relationship property, as is all income earned (and all property bought with it) after the relationship began. Assets like inheritances, gifts and property acquired before a relationship began are separate property, provided they haven’t been intermingled with relationship property.

The PRA is intended to create a regime of fairness and protect those who are vulnerable (often the financially weaker party who takes time out of the workforce to raise children). However, it frequently has unintended consequences, particularly for couples who come into relationships with significant wealth and assets of their own. Think of Swift’s USD 125 million worth of real estate or the fact that if she were an economy, she would be bigger than 50 countries… there would be quite a lot at stake. 

If in doubt, contract out

For couples who do not wish to be caught by the default rules, the best protection is to contract out of the PRA. Contracting out allows couples to ensure that at the end of a relationship their property is divided in accordance with their intentions. These agreements can help to eliminate uncertainty around ‘who gets what’ and address difficulties associated with determining when a couple commences a de facto relationship.

Both parties need to be independently advised to properly contract out of the PRA. While considering the end of a relationship is not the easiest thing to do when the overwhelming feelings are You Belong with Me, a well thought out contracting out agreement helps to avoid conflict and confusion. However, it does need to be kept under review to ensure it remains fair and relevant, as courts have the power to set an agreement aside if giving effect to it would cause serious injustice. 

For good measure, Swift would be well advised to ensure that her broader wealth plan is up to date, including making sure that she has a valid and effective will in place, suitable insurance cover, enduring powers of attorney and appropriate structuring (like trusts or limited partnerships, which are particularly helpful for those with complex affairs or business risk). 

This way, Swift and Kelce can enjoy the Love Story without quite so many risks arising from any future Bad Blood.