When a partner dies, the survivor is often faced with a complex web of grief and administration. Legally, they are also faced with a critical decision under the Property (Relationships) Act 1976 (PRA): do they divide the relationship property, or do they simply take what they are given under the Will (or intestacy rules)?

For years, this has been viewed as a binary "stark choice"—you pick one lane and stay in it. However, the recent decision in Rimmer v Wilton has blurred the lines, suggesting you might be able to have your cake and eat it too. With the matter heading to the Supreme Court, here is a breakdown of the current landscape.

The Law: Option A or Option B?
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Under section 61 of the PRA, a surviving spouse or partner must make a formal choice within six months of the grant of administration.

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Option A (Division): The survivor elects to apply for a division of relationship property under the Act.

The Catch: If you choose Option A, you generally lose your right to inherit. Section 76 dictates that every gift in the deceased’s Will is treated as revoked, and you lose your entitlement under the intestacy rules (if there is no Will). The logic is to prevent "double dipping"—getting half the property plus a chunk of the remainder.

Option B (No Division): The survivor elects not to apply for a division under the Act.

The Benefit: You keep your own assets, take any jointly owned assets by survivorship, and receive whatever inheritance is left to you in the Will or under the Administration Act 1969.

Historically, the rationale was clear: the survivor can take their property entitlement or their inheritance, but not both, ensuring they don't end up with more than the deceased intended.

The Case: Rimmer v Wilton
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The recent Court of Appeal decision in Rimmer v Wilton [2025] NZCA 374 challenged how these options interact with Contracting Out Agreements (often called "prenups" or "s 21 agreements").

The Facts

David Rimmer and Carolyn Wilton were in a de facto relationship. In 2002, they signed a Contracting Out Agreement. The agreement kept their separate property separate but declared their home (the Hunua property) to be relationship property. Crucially, it gave the surviving partner a right to "lifetime occupancy" of the home.

When Mr. Rimmer died in 2016, he did not have a Will (he died "intestate").

Ms. Wilton chose Option B. This meant she:

• Kept her share of the home and her lifetime occupancy right under the Agreement.

• Also claimed her entitlement under the intestacy rules (which included a statutory legacy of $155,000, personal chattels, and one-third of the residue of Mr. Rimmer's estate).

Mr. Rimmer’s children, Nigel and Nicola, challenged this. They argued that by relying on the Contracting Out Agreement to define property shares, Ms. Wilton was effectively "dividing relationship property." Therefore, she should have been forced into Option A, which would strip her of the intestacy payout.

How the Courts Interpreted the Agreement‍

Both the High Court and the Court of Appeal sided with Ms. Wilton, ruling that she could rely on the Agreement and take the intestacy funds.

1. Contracting Out is not "Applying Under the Act" The Courts reasoned that a section 21 agreement is designed to "contract out" of the PRA. Therefore, enforcing such an agreement is not an "application under the Act" for division (which is what Option A is). Consequently, Option B is the correct choice when a valid agreement exists.

2. The Agreement governs the "Estate" The Court held that the Agreement defined what property belonged to whom. Mr. Rimmer’s "estate" was simply whatever was left after the Agreement was applied. Since Mr. Rimmer died without a Will, the mandatory provisions of the Administration Act (intestacy rules) applied to that estate. Ms. Wilton was entitled to her statutory share unless she formally disclaimed it, which she hadn't.

3. No "Double Dipping" Prohibition in the Contract The Court noted that the Agreement didn't explicitly say the survivor couldn't claim under intestacy. It only dealt with property division. If the parties wanted to prevent the survivor from inheriting, they should have made Wills to that effect.

What the Supreme Court Must Decide‍

As this matter proceeds to the Supreme Court, the focus will likely shift from the technical definitions to the legislative policy. The Supreme Court will need to resolve a fundamental tension:

The "Stark Choice" vs. Contractual Freedom: Does the existence of a Contracting Out Agreement override the legislative policy that forces a survivor to choose between property rights and succession rights? The Court must decide if relying on a s 21 agreement effectively constitutes "Option A" behavior, thereby triggering the forfeiture of inheritance.

The Policy Gap: The commentary suggests the lower courts may have disregarded the scheme of Part 8 of the PRA. If a survivor can secure a favorable property division via a contract and take the bulk of the estate via intestacy, have they circumvented the Act's checks and balances?.

Waiver of Rights: The Court may need to determine if electing Option B should be deemed a waiver of rights under a Contracting Out Agreement, or if the two can coexist without undermining the PRA's intent.

Our view: The Intention of the Legislation
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In our view, the current interpretation creates a loophole that defies the spirit of the legislation. The legislative intent of section 61 was to present a clear fork in the road: you either pursue your property rights or you accept your succession rights.

By allowing a survivor to combine the benefits of a specific property division (via an Agreement) with the benefits of Option B (succession), the "stark choice" becomes a "best of both worlds" scenario. This interpretation risks allowing a survivor to receive significantly more than the deceased ever intended—precisely the outcome the election rules were designed to prevent.

Ideally, the choice of Option A or Option B should be mutually exclusive in effect: choosing the "property" route (whether via the Act or a codified Agreement) should exclude the "succession" route, ensuring fairness to other beneficiaries like the children in the Rimmer case. The Supreme Court now has the opportunity to restore this binary balance.

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