If He Wanted To, He Would: Supreme Court Clarifies the Effect of Contracting Out Agreements on Intestacy

Earlier this year, we discussed the Court of Appeal's decision in Rimmer v Wilton: (9) The importance of clear intentions and implications on intestacy: A review of Rimmer v Wilton [2025] NZCA 374 | LinkedIn which considered whether a surviving partner, Ms Wilton, could receive the benefits provided under a contracting out agreement as well as an entitlement under the intestacy provisions of the Administration Act 1969.  The Court of Appeal held that Ms Wilton was entitled to do so.

The Supreme Court has now overturned that decision and, in doing so, delivered an important reminder about the role of contracting out agreements in estate planning.

The Supreme Court's decision

The Court held that, when properly interpreted, the contracting out agreement was intended to comprehensively define the parties' property entitlements upon death. In particular, the agreement provided Ms Wilton with a life interest in Mr Rimmer's share of the relationship property, but no greater entitlement to that share.

A key feature of the judgment was the Court's finding that parties can, through a relationship property agreement, effectively contract out of rights that would otherwise arise on intestacy. The Court considered that the agreement's language, including a clause providing that it was in "full and final settlement of all claims" between the parties, demonstrated an intention that neither party would claim a greater beneficial interest in the other's share of the relationship property.

Testamentary intention

The Court emphasised that Mr Rimmer was free to leave additional property to Ms Wilton if he wished. Nothing in the agreement prevented Mr Rimmer from gifting his separate property or his share of the relationship property to Ms Wilton by will or transferring it to her during his lifetime. He simply did not do so. Instead, he entered into an agreement that gave Ms Wilton a life interest and no further entitlement to his share.

In many ways, the Supreme Court's reasoning can be distilled into a simple principle: If he wanted to leave her more, he would have.

The Court was not prepared to allow the intestacy regime to defeat the parties' clearly expressed agreement about their respective entitlements on death.

Why the decision is important

The decision highlights the importance of viewing contracting out agreements and wider estate planning as part of an integrated process.

For couples entering into a contracting out agreement, careful consideration should be given not only to what happens if the relationship ends in separation, but also to what should occur on death. If the intention is to limit a survivor's entitlements to those expressly provided for in the agreement, that should be made clear.

The safest approach is for parties to prepare or update their contracting out agreement and will at the same time, with the documents drafted in contemplation of the other. This will ensure that the intestacy regime is not engaged at all. In Mr Rimmer’s case, a properly drafted will would have left no room for doubt in respect of Ms Wilton’s entitlements, potentially avoiding years of litigation.

Key takeaway

The Supreme Court's decision confirms that contracting out agreements can have significant consequences beyond relationship property disputes on separation. They also affect a surviving partner’s entitlements on death, including rights that may arise under the intestacy regime.

For anyone with a contracting out agreement in place, now is a good opportunity to review whether your estate planning documents accurately reflect your current intentions. As Rimmer v Wilton demonstrates, if you want to leave something to your partner, the safest course is to say so clearly.