What Happens if a Party Dies Before the Finalisation of a Property Settlement Matter

When a couple separates for good, it’s not uncommon for legal and financial professionals to encourage both parties to formalise the split sooner rather than later… and there are good reasons for this.

One of those reasons is the situation where one half of the ex-couple dies before a property settlement can be reached. If mediation or court proceedings leading to a property settlement have not been commenced before the death of one party, it may prove impossible for the surviving ex-spouse to be provided for from the deceased person’s estate. This can be particularly distressing if the deceased person was the major breadwinner during the relationship or retains most of the assets.

Other options such as a family provision application seeking a share of the deceased’s estate may still be available but again, time is of the essence as time limits to commence an action apply.

This situation can end up being quite complex, legally and financially, and so the counsel of an experienced legal professional is advised.

The case of Alagiah v Crouch

The 2015 Supreme Court of Queensland case of Alagiah v Crouch is a stark illustration of the situation where one party dies before a property settlement is reached.

Mrs Alagiah and her former husband were married for 22 years and had no children. They separated in 2006 and divorced in May 2012. The husband then suddenly died in early 2013.

After separating the parties had attempted to reach a property settlement, but no agreement had been reached at the time of the husband’s death and neither party had filed proceedings in the court. As a result, Mrs Alagiah had limited options to make a claim on a share of the assets from the marriage.

Mrs Alagiah then sought to make a family provision application for adequate provision for her proper maintenance and support from her former husband’s estate. The court found, however, that she was not a ‘dependent former wife’ who was receiving, or entitled to receive, maintenance from Dr Alagiah prior to his death. After their separation, Mrs Alagiah had no longer been supported by the deceased.

Her application was also well outside the statutory time limit for such applications – made 18 months later than the time limit of nine months after the death when a family provision application should be made.

The take-outs

Mrs Alagiah’s case demonstrates a number of important considerations for people who separate but have yet to negotiate a property settlement. Key among these is that once a couple separate, the parties should move quickly to finalise a property settlement or binding financial agreement. While property settlement applications must be made within 12 months of divorce, failure to lodge court proceedings before this time may place you in Mrs Alagiah’s position if your former spouse dies.

Had court proceedings been filed before his death, Mrs Alagiah would likely have been able to continue her property settlement matter against her former husband’s legal personal representative (i.e. the executor).

Having divorced, and not relied on her former husband for financial support, Mrs Alagiah could not then make a family provision application for provision from his estate.

If you are going through a separation and divorce, consulting with a legal firm that specialises in the issues around property settlements and wills and estates is vital. At Twohill Lawyers, we understand your situation and will provide the right advice in order to secure your rightful share from the former relationship. Contact us today on (07) 5571 1450 for an initial discussion.