Join us for a practical webinar addressing the implications of the decision in Rimmer v Wilton for property transactions, estate planning, estate administration, and relationship property agreements.
Historically there has been uncertainty about the role contracting out agreements play on death, and whether they must be implemented irrespective of whether a surviving spouse or partner elects Option A or Option B under the Property (Relationships) Act 1976 (“PRA”), or whether they only apply under Option A.
The Supreme Court in Rimmer v Wilton [2026] NZSC 122 confirmed that:
- Contracting out agreements will apply on death in every case to determine what falls into an estate and what does not, irrespective of legal ownership structures, and irrespective of whether Option A or Option B is elected; and
- Most contracting out agreements containing standard clauses which apply on death will operate to exclude intestacy entitlements, even where Option B is elected.
Unless the issue is addressed squarely in a contracting out agreement, couples who have forgotten about a historical contracting out agreement (and failed to advise their lawyers of its existence) may find a later decision to own property jointly is undermined on death, and a key aspect of their estate planning has been undermined.
This decision has seismic implications for lawyers who practice in property, estate planning, estate administration, and family law. However, lawyers can take steps to manage that risk when taking instructions in relation to property transactions and estate planning. Contracting out agreements can also be drafted to ensure a couple have flexibility to change legal ownership structures at a later stage without them being undermined on death.
After death, steps can also be taken to reduce the risk of a surviving spouse or partner ending up in a difficult situation with unnecessary litigation risk.
