A recent decision of the Supreme Court of New Zealand has highlighted an issue that surprises many couples: even where partners have carefully documented their intentions in a contracting out agreement, problems can still arise if there is no will.

The case of Rimmer v Wilton is a timely reminder of the importance of having both a properly drafted contracting out agreement and an up-to-date will.

What happened?

David Rimmer and Carolyn Wilton were in a de facto relationship and jointly owned property in Auckland. In 2002, they entered into a contracting out agreement under the Property (Relationships) Act 1976. The agreement set out what property belonged to each person and what would happen both if they separated and if one of them died. It also stated that the agreement was intended to be a full and final settlement of any claims they might have against each other.  

When Mr Rimmer died in 2016, however, he had not made a will. He died intestate, meaning his estate was distributed according to the statutory intestacy rules.

Ms Wilton took the position that she was entitled to retain both the benefits she received under the contracting out agreement and was also entitled to a share of Mr Rimmer’s estate under the intestacy provisions. Mr Rimmer’s children (from an earlier relationship) disagreed, and the dispute eventually reached the Supreme Court.

The Supreme Court’s decision

The Court of Appeal agreed with the High Court and held that Carolyn Wilton could rely on both the contracting out agreement and the intestacy provisions of the Administration Act 1969. On that approach, she was entitled to retain her rights under the agreement while also receiving an additional share of David Rimmer’s estate as his surviving de facto partner – effectively denying Mr Rimmer’s children anything from his Estate until after her death.

However, the Supreme Court of New Zealand took a different view. It found that the contracting out agreement was intended to be a comprehensive and final settlement of the parties’ property rights, including on death. The Supreme Court held that allowing Ms Wilton to also claim an intestacy entitlement would be inconsistent with the agreement’s terms, particularly the provision recording a “full and final settlement” of claims between the parties.

As a result, the Supreme Court overturned the Court of Appeal’s decision and ruled that Ms Wilton’s rights were limited to those provided for in the agreement itself.

Importantly, the Court confirmed that it is possible for a contracting out agreement to effectively limit or exclude rights that a person might otherwise receive from an estate under intestacy laws. The Court found that the agreement clearly showed the parties intended to regulate their property rights on death and that those arrangements were binding on their estates.

Why this matters

Many people assume that if they have a contracting out agreement, their affairs are fully sorted. This case demonstrates that reality can be more complicated.

Although the agreement ultimately determined the outcome, the absence of a will led to years of uncertainty, litigation through three levels of court, and significant legal costs for all parties. What appeared to be a carefully planned arrangement still ended up before the country’s highest court.

A well-drafted contracting out agreement and a properly prepared will perform different but complementary functions:

  • A contracting out agreement records how relationship property is to be owned and dealt with during the relationship, on separation, or on death.
  • A will governs what happens to your estate when you die and can ensure your broader estate planning objectives are carried out.
  • When these documents are drafted to work together, the risk of disputes is significantly reduced.

The lesson for couples and families

Whether you are entering a new relationship, bringing assets into a relationship, operating a family business, protecting children from a previous relationship, or simply wanting certainty about your affairs, having both documents in place is essential.

Without a contracting out agreement, the default rules of the Property (Relationships) Act may apply in ways you did not intend. Without a will, the intestacy rules decide who receives your estate, regardless of whether those outcomes reflect your wishes.

The Rimmer case shows that even where a contracting out agreement exists, the absence of a will can create uncertainty and costly litigation for surviving partners and children.  

How we can help

Our team regularly advises clients on contracting out agreements, wills, and broader estate planning. We can help ensure that your documents are consistent, legally effective, and tailored to your family circumstances.

If you have a relationship property agreement but no will, or if your circumstances have changed since your documents were prepared, now is a good time to review your arrangements. A relatively modest investment in planning today can spare your family significant stress, expense, and conflict in the future.

Contact us to discuss a contracting out agreement, a will, or a review of your existing estate planning documents.

David Abricossow | Wellington Family Law Partner |07 349 7497 | david.abricossow@jbmorrison.com