Contracting Out, Intestacy, and What a Surviving Partner Can Receive: Understanding Rimmer v Wilton (2025)
The recent Court of Appeal decision in Rimmer v Wilton addresses a question that arises when a partner dies without a will: Can a surviving spouse or de facto partner who has entered into a contracting-out agreement under s 21 of the Property (Relationships) Act 1976 still receive their full entitlement on intestacy?
The Court held that unless a couple clearly states otherwise, a surviving partner can receive both. The case is now heading to the Supreme Court, but the Court of Appeal’s decision already gives helpful clarity for anyone dealing with relationship property and estates.
The facts in Rimmer v Wilton are relatively simple. David Rimmer and Caroline Wilton were in a long-term de facto relationship and had a s 21 agreement that set out what was separate property, what was relationship property, and gave the survivor a right to live in the shared home for life. The agreement did not deal with inheritance. When David died without a will, his estate had to be distributed under the intestacy rules. At this point, the PRA required Ms Wilton to choose between Option A and Option B. Option A lets the survivor apply for a formal relationship property division but means they usually cannot also receive anything under a will or intestacy. Option B, which Ms Wilton chose, means the survivor forgoes a PRA division and instead takes whatever they are entitled to under the intestacy rules.
David’s children challenged her entitlement. They first argued that choosing Option B meant she could no longer rely on the s 21 agreement. They later went further, arguing that the s 21 agreement itself prevented her from inheriting at all, so she should only get the life-occupancy right and nothing from the estate.
The Court of Appeal rejected both arguments. It clarified that Option A and Option B serve two different purposes:
- Option A allows the survivor to apply for a division of relationship property, but doing so normally means they cannot also receive gifts under a will or intestacy.
- Option B means the survivor chooses not to pursue a PRA division and instead takes whatever they are entitled to under intestacy rules.
It was held that choosing Option B does not cancel a valid s 21 agreement. If the couple have contracted out of the PRA, that agreement continues to define the property and how it is treated; Option B simply allows the survivor to receive their inheritance as well.
In practical terms, that meant Ms Wilton received her own separate property, her agreed share of the relationship property, the lifetime occupancy right, and the full inheritance provided by s 77 of the Administration Act.
Attempts to limit her to the life interest alone were unsuccessful. Although there may be further questions about how the agreement was applied after the house was sold, those issues were not before the Court.
The decision makes it clear that s 21 agreements and the intestacy regime generally operate side by side unless the agreement expressly states otherwise. If couples want to exclude inheritance rights, that must be clearly spelled out and supported by proper estate planning.
This case also highlights why Option B is often the logical choice for a surviving partner who wishes to rely on a contracting-out agreement while still receiving whatever the succession laws provide.
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