If you and your spouse or partner have signed a Contracting Out Agreement, a recent Supreme Court decision has confirmed that your Agreement can override the default rules about inheritance if one of you dies without a Will. Ensuring that you have an up to date Will, and that it works in harmony with your Contracting Out Agreement, is essential.
Contracting Out Agreements (otherwise known as prenups or relationship property agreements) are a legal contract under the Property (Relationships) Act 1976 (PRA). They allow couples to decide how their property, assets, and debts will be divided if their relationship ends, and override the default rules under the PRA.
The finding
Before the Supreme Court’s decision released 4 September 2026, it was accepted that a surviving partner could keep both their Contracting Out entitlements as well as their entitlements under the deceased partner’s Will, or from intestacy laws. Intestacy applies to an estate when someone does not leave a Will.
Rimmer v Wilton has now settled that the surviving spouse could not claim intestacy entitlements from her deceased partner’s estate because she had agreed not to in their Contracting Out Agreement. The result is that Ms Wilton was only entitled to claim her share of the couple’s home, and a life interest in Mr Rimmer’s share. Mr Rimmer’s share in the home and any other property has now passed to his children.
Why does this matter?
There are four practical takeaways:
1. Your Contracting Out Agreement may carry real weight on death as well as on separation. The Supreme Court has confirmed that a well drafted Contracting Out Agreement can effectively replace the default intestacy rules for relationship property. This gives couples certainty, but it also means that the terms of the Contracting Out Agreement need to be carefully considered with the possibility of death in mind, not just a break up.
2. The decision is a timely reminder to review your Will alongside your Contracting Out Agreement. The two work hand in hand, and focusing on one without the other can lead to outcomes nobody intended.
3. If you do not have a Will, a Contracting Out Agreement could significantly limit what your surviving partner receives. In this case, Mr Rimmer did not leave a Will. Had he done so and left his share to Ms Wilton, the outcome would have been different. The lesson is clear: make a Will that works with your Contracting Out Agreement because this case is a clear illustration of what happens when that step is not taken.
4. The Court acknowledged the complexity of the current law in this area and noted the Law Commission’s view that reform is needed. In the meantime, contact us for expert advice on your individual situation. If it has been some time since your documents were reviewed, or if you have experienced life changing events such as a new relationship, children or asset changes, now is the time to act.
Reach out to our experienced Trust and Wealth Management team for advice on your Contracting Out Agreement.
