Property settlement & the death of your partner

What happens if one party dies after separation but before a property settlement is started or finalised?

Prior to property settlement proceedings being commenced

If a married or de facto couple separates, and one party dies prior to any property settlement proceedings being commenced before the Court, then there is no ability for the surviving party to commence property settlement proceedings. Any potential claim the surviving party may assert that they have would need to be pursued by the surviving party through a Family Provision Application against the estate of the deceased.

After property settlement proceedings are commenced

If one party has already commenced proceedings before a Court for property settlement orders, and one party to that matter subsequently dies, the proceedings do not automatically come to an end. Section 79(8) of the Family Law Act 1975 (“the Act”) allows a settlement of property case to continue after the death of one party to the marriage by the substitution of the deceased's legal personal representative. Similarly, section 90SM(8) of the Act applies to de facto couples.

Whilst there is no definition of a “legal personal representative” within the Act, this is most commonly the person who is nominated as the executor in the deceased’s Will. If a party to property settlement proceedings dies, then the matter is placed on hold until the legal personal representative makes a formal Application to the Court to be substituted as a party to the proceedings and then the proceedings resume. The legal personal representative must then comply with all of the usual requirements of a party to Court proceedings for example, filing the necessary court documents, providing financial disclosure to the other party and participating in court-ordered dispute resolution.

The Court does not have to make property settlement orders if a party to the proceedings dies. The Act says that the Court must consider whether it would have made property settlement orders if the deceased party had not passed away and whether or not it is still appropriate, just and equitable to make the orders.

Wills and property settlement

It is important to understand that if a party has not updated their Will after separating from their former spouse, the legal personal representative of the deceased party may actually be their former spouse and the surviving party to the Court proceedings. This would make the surviving party both the applicant and the respondent to the Court proceedings and would effectively bring the Court proceedings to an end. This is one of the reasons why it is so important to update your estate planning documents properly if you and your spouse separate.

Defacto relationships and property settlement

Importantly if you were in a defacto relationship and court proceedings have not been started prior to the death of the former partner, the surviving defacto partner is likely to have major difficulties in being able to make a Family Provision Application, particularly if they were not financially dependent on them and had no children.  Accordingly it can be critical to file a claim prior to the death of a defacto partner given the extensive problems and barriers trying to pursue a claim after death. 

In the unlikely event that both parties to the Court proceedings pass away, then the proceedings automatically come to an end as the Court no longer has the jurisdiction to decide the matter.

There is no “one size fits all” approach to a property settlement and Family Provision Applications against deceased estates. If you are separated and you have not finalised your property settlement, we strongly recommend that you obtain legal advice sooner rather than later. Contact our office to make an appointment with one of our solicitors to discuss your circumstances and obtain advice on your situation on (07) 4963 2000 or through our online contact form below.