Navigating Death in Family Law: Property Settlement Challenges and Legal Solutions
If my ex dies during property settlement proceedings what can I do? What happens when one party dies in family law?
Rafton Family Lawyers in Penrith Richmond Parramatta Campbelltown are available to assist with expert advice in these complex situations.
Each Family law matter presents with its own different set of unique challenges. However, the death of a client or an opposing party brings with it another layer of complexity and headaches for litigants and practitioners.
Talking about death can be a sensitive topic, and coupled with family law disputes, even more delicate. Nevertheless, it is an area in family law that is sometimes not discussed often enough, if at all. There are certain rules and restrictions that come into play when a party dies in the midst of property settlement negotiations or proceedings, and the overlap between succession law and family law can have long lasting impacts on parties and their families, if not properly prepared. Here at Rafton’s, we understand the importance of ensuring our clients are equipped with the knowledge and tools to make informed decisions when this arises. So, what does happen when a party dies, can there still be a property settlement? Does it all just go away? What if there is a Will? The below article discusses some of the options and factors for parties to consider when faced with death in family law proceedings, and how our team at Rafton’s can assist you.
The possibility of a party dying either before or during proceedings should be a consideration for all parties in family law proceedings. If a party dies during property settlement negotiations, a property settlement can still occur. However, this can only happen if an Application seeking Orders in relation to a property settlement has been filed BEFORE one of the parties passes away. As set out in Section 79(8) of the Family Law Act 1975 (Cth), the Federal Circuit and Family Court of Australia only has jurisdiction to deal with a matter if proceedings were commenced when one party was still alive. Where the surviving party seeks to file an Application for property settlement AFTER the other party has passed, this cannot be done. Instead, the surviving party must rely on any Will left by the deceased or the relevant sections of the Succession Act 2006 (NSW) for a family provision claim. It is one of the many reasons why the team at Rafton Family Lawyers provides comprehensive advice in both family law and estate planning matters, to ensure that you are prepared for all the possibilities in a challenging time.
When it comes to family law proceedings already on foot however, a party should not assume that their matter will continue as usual. If the matter is already in Court, Chapter 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, outlines what needs to occur before a matter can progress in these circumstances. It is therefore essential that if parties are concerned that the death of a party is imminent, they are appropriately advised about timing of not only commencing proceedings, but what the process is once a party passes away.
If proceedings had been commenced prior to the death of a party, then section 79(8) of the Family Law Act 1975 (“the Act”) comes into play. Section 79(8) of the Act is for a personal legal representative to be appointed to continue the proceedings after the death of a party, on behalf of that party. However, that jurisdiction is qualified by two additional considerations:
- Firstly, would the Court have made an order had the deceased not died; and
- Secondly, is it still appropriate to make an order with respect to property.
Prior to an order being made for the continuation of proceedings upon the death of a party those two preconditions must be made.
It is also vital for clients to be advised about the possibility of a surviving party seeking to effectively “double dip” in an asset pool. This occurs where a property settlement has already taken place, and then the surviving party then seeks to make a claim over the deceased party’s estate as an eligible person prescribed by section 57 of the Succession Act 2006 (NSW).
Whilst some protection is offered by the comments from Sackville AJA in Lodin v Lodin [2017] NSWCA 327, where it was held that, “…in most cases, such a settlement if otherwise unimpeachable, is likely to terminate any obligation on the deceased to make a testamentary provision for his or her former spouse.” It was also held that, “…a property settlement in itself is not necessarily an absolute bar to a family provision claim…” and that, “it may be very important to determine whether there were (or are) features of that relationship that can be said to create a moral obligation on the deceased to make testamentary provision for the claimant… further, the conduct of the deceased may be relevant to the question posed by Section 59(1) (b) of the Succession Act”
As a result, parties should not assume that once a property settlement has been finalised, their assets are protected from a former spouse or de facto from a family provision claim in the Supreme Court of NSW. There are some ways to remedy this concern, such as entering into a document often referred to as a Section 95 Deed of Settlement and Release. If you are concerned that your estate may be subject to a family provision claim in the future, Rafton’s family law and estate planning teams can advise you as to the likelihood of such a claim, and your options to prevent that from occurring.
The key takeaways for parties navigating the above issues are that timing is everything, and the overlap between succession law and family law requires a wholistic approach to advice. Having offices in the Hawkesbury, Macarthur and Parramatta regions, Rafton Family Lawyers is here to offer that specialist and wholistic advice so fully informed decisions can be made about the next step in a matter.
For more information or to enquire about a consultation, contact us at reception@rafton.com.au or call us 0286077184.