What Happens if Your Spouse Died Before Your Property Settlement is Finalised?
A recent decision of the Supreme Court of Queensland illustrates the difficulties caused where parties have an incomplete property settlement at the time of death of one spouse.
In the case of Alagiah v Crouch, Dr and Mrs Alagiah were divorced, however, Dr Alagiah died prior to the parties finalising their property settlement. The parties had commenced negotiating a property settlement but they had an incomplete agreement at the time of Dr Alagiah’s death and neither had filed proceedings in the Court. After Dr Alagiah died, it was not possible for Mrs Alagiah to file an application for property settlement in the Court, meaning she had limited options available to acquire a share of the matrimonial assets.
One option that Mrs Alagiah sought to pursue was to make a claim for family provision from her former Husband’s estate. A family provision claim is an application by a deceased person’s spouse, child or dependant where adequate provision for their proper maintenance and support has not been made in the Deceased’s Will. The application must be made within 9 months after the death of the Deceased.
Unfortunately for Mrs Alagiah, there were a number of difficulties with this course of action. Firstly, Mrs Alagiah was not entitled to bring an application for provision. To be an eligible applicant, Mrs Alagiah needed to prove that she was a ‘dependent former wife’ by showing that she was receiving, or entitled to receive, maintenance from Dr Alagiah prior to his death. The Judge stated, “There is no doubt that the applicant had a right to bring an application for maintenance in the Family Court prior to Dr Alagiah’s death, however, no such application was brought. Further, “…in order for the former wife to have been entitled to [maintenance], she must have had, at the date of the deceased’s death, “an actually crystalized right” to payments of maintenance, such as a right under an existing order or agreement”. As Mrs Alagiah was not receiving, nor entitled to receive, maintenance from Dr Alagiah prior to his death, she was not a dependent former spouse.
Secondly, the time limit for instituting a family provision claim had already expired almost 18 months earlier. Mrs Alagiah applied for an extension of time, however, the Court refused her application. While Mrs Alagiah adequately explained her reason for delay, being that she was suffering from extreme financial hardship, the Judge did not accept that she was a dependent former spouse (as explained above).
Mrs Alagiah is bound to have asked herself a number of “what if” questions following her unsuccessful application. Had she commenced proceedings for property settlement prior to Dr Alagiah’s death, the matter could have been continued against his legal personal representative (i.e. the executor, Mr Crouch). Further, had Mrs Alagiah remained married to Dr Alagiah at the time of his death, she would technically have been an eligible applicant under the family provision legislation. Whether her application would have succeeded is another question.
Noting that applications for property settlement must be made within 12 months of a divorce becoming final, this case also serves as a reminder about not filing premature applications for divorce and not delaying filing of financial applications.
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