The Family Law Act allows a court to make an order for a property settlement after the death of a spouse party.
A Full Court decision established a 4 step process for determining applications for property settlement-
- Identifying and valuing the property available for distribution,
- Assessing the contributions of the parties to the asset pool,
- The factors set out in Section 75(2) and 90SF(3) of the Family Law Act,
- Whether it is just and equitable to make an order.
The Court must take into account the age and health of the parties, their respective capacity for gainful employment, financial commitments including commitments to children, a standard of living that is reasonable in all the circumstances, the need to protect a party who wants to continue their role as a parent amongst other things.
The Family Law Act acknowledges that a party to a marriage may die before property settlement proceedings are completed and also provides for any order to be enforced against or by the estate of the deceased party.
Where the Court is considering making an order for property settlement which is continued by or against a person’s legal representative it must decide whether it would have made an order if the deceased party had not died and whether despite the death it is still appropriate to make the order. The court will only make an order if it is just and equitable in all the circumstances.
A decision of the Family Court of Australia (Watson and Ling 2013FamCA 57) applied those rules to de facto couples. In reaching the decision the court considered the asset pool comprised primarily the surviving party’s property and that the deceased had made minimal contributions to that asset pool. The Court determined that it would not be just and equitable to alter the interest of the parties and declined to make an order.
This is a general overview only. Please contact our Mr McClelland if you have any queries.