What happens should both parties pass away during Family Court property proceedings?

10 August 2020

By Victor Tham

The answer is simple, the Family Court has no jurisdiction to do anything when both parties pass away during Family Court property proceedings other than strike out the application.

However, not everything in life (or death) is that simple.

  1. What if there are third parties to the proceedings involved?
  2. Or an intergenerational family business that continues to run?

Third Parties to the Proceedings

Property proceedings cannot be commenced where one of the parties has already died.

As Rachel Harkness wrote in her article here, s. 79(8) of the Family Law Act 1975 gives the Family Court power to continue proceedings after a spouse passes away but this only applies after Family Court proceedings have already been commenced but before they are completed.

The wording of s. 79(8) is relevant, as the subsection reads where “a party to the marriage dies”.

There are 2 takeaways from these 6 simple words:

  • Section 79(8) only applies when “a party”, not “both parties”;
  • The proceedings cannot be survived by a third party to the proceedings, as that person is not a “party to the marriage”.

In 2007, The Honourable Le Poer Trench J in Estate of Mackenzie & Estate of Mackenzie and Anor [2007] FamCA 882 considered the dictionary definition of the word “a” to reach the view that the ordinary meaning of “a” is synonymous with “one” or “single”.

Business Structures

Whilst at least one party (of the marriage) is alive, the Family Court can deal with some issues to avoid further heartache for the surviving family members after both spouses die. Some things to consider are:

  • Does the business’ structure provide enough protection to allow the business to continue without the deceased parties?
  • Does the business rely on the deceased party to exercise certain powers? If there are no successors in place, this may impact the usual conduct of the business or have tax implications.
  • If the business operates through a family trust, the trust deed may allow for the deceased trustee, guardian or appointor to name another person outside of the family to succeed them. These positions may even have the power to change the class of beneficiaries.

We’re Here to Help

Family law matters can be difficult and complex. If you require any assistance with a family law dispute, always contact a legal practitioner who will be able to help.

If you are concerned about death or imminent death on property entitlements or the impact of separation on a family business, please contact our office to make an appointment to discuss with one of our family lawyers located in Perth. We can also work closely with your financial planner and / or accountants to ensure the best strategy for you moving forward. More information about our services can be found at our About Us page here.

Disclaimer

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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