What happens if my ex dies before the property settlement is finalised? Can I continue proceedings? Do my rights get priority or do the beneficiaries of the estate get priority?
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Can someone use their Will to prevent their former spouse from receiving a property settlement?
When a couple separates, dividing their property can sometimes take months or even years. But what happens if one person dies before their property settlement is finalised?
Does the property settlement automatically end? Does the deceased person’s Will determine what happens to their assets? And can someone structure their Will to prevent their former spouse from receiving a property settlement?
A recent Federal Circuit and Family Court decision, Musaev & Musaev [2026] FedCFamC1F 641, considered these very questions.
The decision highlights an important principle: A person cannot necessarily use their Will to prevent an existing family law property settlement claim from proceeding after their death.
What happened in Musaev & Musaev?
The wife commenced property settlement proceedings against her husband in December 2024.
Unfortunately, the husband died in 2025, before the proceedings had been finalised.
During his lifetime, the husband had established a trust. That trust owed him approximately $2.41 million.
The husband’s Will contained a clause forgiving the $2.41 million debt owed to him by the trust.
His sons, who were not the wife’s children, were appointed executors of his estate.
This created a significant problem for the wife.
If the debt was forgiven, approximately $2.41 million would effectively be removed from the assets available to the estate. Without that debt, the estate did not have sufficient assets to satisfy the property settlement the wife was seeking.
The question for the Court was whether the husband could effectively forgive the debt through his Will before the wife’s family law property settlement claim was determined.
What did the wife argue?
The wife’s argument was relatively straightforward.
Her husband was owed $2.41 million when he died. That debt was an asset belonging to him.
She argued that he should not be able to simply forgive that debt through his Will and, in doing so, prevent her from obtaining a property settlement.
Essentially, the wife wanted the debt to remain available while the Court determined her entitlement.
What did the executors argue?
The husband’s sons, acting as executors of his estate, argued that the Will expressly forgave the debt.
They also argued that the wife was not a creditor of the estate.
Although she had commenced property settlement proceedings, the Court had not yet made an order requiring the husband to pay her anything.
In other words, she had a potential entitlement to a property settlement, but no final order establishing what she was entitled to receive.
The executors argued that the wife’s potential claim should not prevent the debt forgiveness from taking effect.
What did the Court decide?
Justice Jarrett determined that the debt forgiveness could not simply operate to defeat the wife’s pending family law proceedings.
The Court found that forgiving the debt through the Will was, in substance, equivalent to leaving the value of that debt as a gift to the trust.
The purported release was ineffective at law as an immediate forgiveness of the debt. At most, it operated as a testamentary gift to the trustee.
Importantly, the executors could not give effect to that gift before the wife’s existing property settlement proceedings were determined.
However, this did not mean the wife automatically became entitled to the $2.41 million.
The Court still needed to determine what property settlement, if any, she should receive.
The important distinction is that the wife retained the right to have her existing property settlement claim determined, despite her husband’s death, and the provisions of his Will could not be used to defeat any property settlement order the Court might ultimately make in her favour.
What does the Family Law Act say about property settlements after death?
Section 79AA(8) of the Family Law Act 1975 (Cth) specifically addresses circumstances where a party dies before property settlement proceedings are completed.
Under section 79AA(8)(a), proceedings may continue by or against the deceased person’s legal personal representative, usually the executor or administrator of their estate.
However, the proceedings do not automatically result in a property settlement order.
Under section 79AA(8)(b), the Court must be satisfied of two important matters:
- The Court would have made a property settlement order if the deceased person had not died.
- It remains appropriate to make that order despite the person’s death.
If those requirements are satisfied, the Court may make a property settlement order.
Section 79AA(8)(c) also provides that an order made under these provisions may be enforced against, or on behalf of, the deceased person’s estate.
This means that the death of one party does not necessarily bring an existing property settlement dispute to an end.
What happens to the proceedings?
Rule 3.19 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 provides the practical process.
Following the death of a party, the surviving party or the deceased person’s legal personal representative must seek procedural directions from the Court.
The Court can then order that the executor or administrator be substituted for the deceased person in the proceedings.
The property settlement can subsequently continue, subject to the requirements of the Family Law Act.
What about de facto relationships?
Similar provisions apply to de facto couples.
Section 90SMA(8) of the Family Law Act 1975 allows existing property settlement proceedings involving de facto partners to continue after a party’s death, subject to the relevant statutory requirements.
Does the Succession Act give family law proceedings priority over a Will?
In Queensland, the administration of deceased estates is governed principally by the Succession Act 1981 (Qld).
Although the Act does not expressly state that pending family law property settlement proceedings have priority over every other estate claim, several provisions are relevant.
Section 52 – Duties of personal representatives
Section 52 requires executors and administrators to collect the deceased person’s assets and administer the estate according to law.
An executor cannot simply distribute assets in accordance with the Will without considering the estate’s legal obligations.
Where existing family law proceedings may affect the assets available for distribution, the executor must take those proceedings into account.
Section 56 – Property available for payment of debts
Section 56 provides that property passing to an executor or the Public Trustee is available to satisfy the deceased person’s debts.
A provision in a Will that is inconsistent with this requirement is ineffective against creditors.
However, there is an important distinction.
A person pursuing an unresolved family law property settlement claim is not automatically a creditor of the estate.
In Musaev, the wife’s ability to continue her claim arose from section 79AA(8) of the Family Law Act, rather than from her having an existing creditor entitlement.
Sections 57 and 59 – Payment of estate debts
These sections deal with the payment of debts from insolvent and solvent estates.
They establish rules concerning estate liabilities and which assets may be used to discharge those liabilities.
They do not, however, establish a blanket rule that a pending family law property claim automatically takes priority over every creditor.
The interaction between family law proceedings and estate administration depends on the circumstances, including whether a property settlement order has been made.
A practical example where an ex dies before the property settlement is finalised
Consider the following situation.
A husband and wife separate after a lengthy marriage.
The husband has:
- $500,000 in personal assets.
- A family trust that owes him $2.5 million.
The wife commences property settlement proceedings.
Before the Court determines how their assets should be divided, the husband dies.
His Will contains a clause stating that the family trust no longer has to repay the $2.5 million debt.
If that clause were immediately effective, the assets held by the husband’s estate would effectively reduce from $3 million to just $500,000.
The wife could potentially be left pursuing a property settlement against an estate with insufficient assets.
However, applying the principles considered in Musaev, the executors cannot simply rely on the debt-forgiveness clause to defeat the wife’s pending property settlement claim.
The Court must first have the opportunity to determine whether a property settlement order should be made.
If the statutory requirements are satisfied, the Court can make an order notwithstanding the husband’s death.
This does not mean the wife automatically receives half of the estate, or any particular amount.
Her entitlement must still be assessed under the relevant family law principles.
What if Property Settlement Proceedings Have Not Started Before Death?
An important distinction under the Family Law Act 1975 is that property settlement proceedings must generally have commenced before a party’s death to be capable of continuing against their estate.
Simply negotiating a settlement, exchanging financial disclosure or engaging solicitors does not constitute commencing Court proceedings.
Section 79AA(8) allows existing property settlement proceedings to continue after a party’s death, but it does not provide a right to commence new proceedings after death.
While a surviving spouse may have alternative rights under succession law, these are different from a family law property settlement.
Obtaining advice promptly is therefore particularly important where a former spouse is seriously ill or there are concerns that they may die before property matters are resolved.
What if your ex dies before the property settlement is finalised? What does this decision mean for you?
The decision in Musaev & Musaev highlights several important considerations.
1. Death does not necessarily end a property settlement.
Where family law property proceedings have already commenced, the surviving party may be able to continue those proceedings against the deceased person’s estate.
2. A Will cannot necessarily override an existing family law claim.
Attempting to forgive debts or make testamentary gifts does not automatically prevent the Court from determining an existing property settlement claim.
3. Executors must consider unresolved family law proceedings.
Executors should exercise particular caution before distributing estate assets or giving effect to testamentary arrangements that could prejudice existing property settlement proceedings.
4. Timing matters.
Whether Court proceedings have commenced before a party’s death can have significant consequences. If proceedings have not commenced, the surviving party generally cannot pursue a property settlement under the Family Law Act and may instead need to rely on rights available under succession law. However, if proceedings have already commenced, they may continue against the deceased person’s estate. Where final property settlement orders have already been made, those orders can generally still be enforced after death.
5. A successful claim is not guaranteed.
The continuation of proceedings does not automatically entitle the surviving party to a property settlement.
The Court must still be satisfied that the statutory requirements for making an order have been met.
The bottom line – what happens when your ex dies before the property settlement is finalised
The decision in Musaev & Musaev [2026] FedCFamC1F 641 reinforces an important principle in Australian family law.
A person’s death does not necessarily extinguish their former spouse’s right to pursue an existing property settlement claim.
In this case, the husband had attempted to forgive a $2.41 million debt through his Will, which would have substantially reduced the assets potentially available to satisfy his wife’s property settlement.
The Court determined that the purported forgiveness operated, at most, as a testamentary gift that could not be given effect ahead of the wife’s pending proceedings.
The wife was not automatically entitled to the debt or any particular settlement amount. However, she remained entitled to have her existing claim considered.
For separating couples, the decision is also an important reminder of the value of obtaining timely legal advice and formally resolving property matters.
A property settlement is not necessarily defeated by death, and a Will does not automatically override obligations that may arise under the Family Law Act.
Need Advice About the impact if your ex dies before the Property Settlement is finalised?
If you have separated and are concerned about what might happen if your ex dies before the property settlement is finalised, it is important to understand your legal rights and options.
Whether property settlement proceedings have already commenced, your former partner has passed away before a settlement was finalised, or you are concerned about how a Will or family trust may affect your entitlement, obtaining legal advice early can make a significant difference.
At Barton Family Lawyers, our experienced family lawyers can help you understand your rights, navigate complex property settlement disputes and protect your financial interests.
Contact Barton Family Lawyers today to arrange a consultation and discuss your circumstances with one of our experienced family lawyers.
