Family Property Claims Following the Death of a Spouse
What happens to a family property claim following the death of one of the spouses?
Pursuant the Family Property Act, RSA 2000, c F-4.7, an application for a family property order can be made in various circumstances, including after:
- A judgment of divorce has been granted;
- A spouse has obtained a declaration of irreconcilability under the Family Law Act, or
- Spouses have been living separate and apart for a continuous period of at least one year.
(See sections 5 and 5.1 of the Family Property Act, for additional conditions to an application for a family property order. Note also, the limitation period for making an application for a family property order at sections 6 and 6.1 of the Family Property Act.)
Family Property Claim by Surviving Spouse
Following the death of a spouse, section 11 of the Family Property Act permits a surviving spouse to commence or continue an application for a family property order where the application could have been commenced immediately before the death of the spouse (i.e. one of the circumstances above existed prior to the death of the deceased spouse). The surviving spouse must, however, commence the application for a family property order within 6 months of the date of issue of a grant of probate or administration of the estate of the deceased spouse.
Upon a surviving spouse bringing an application for a family property order, the executor of the deceased spouse’s estate is required to hold the estate subject to any family property order that may be made and not proceed with the distribution of the estate, other than in accordance with the family property order.
Pursuant to section 15 of the Family Property Act, any money paid or property transferred to the surviving spouse pursuant to a family property order is deemed to never have been a part of the estate of the deceased spouse with respect to any claims against the estate by a beneficiary under a will or intestate or by a family member for maintenance and support. Accordingly, family property claims are to be dealt with first, having priority over any claims against the estate by a beneficiary under a will or intestate or by a family member for maintenance and support.
Family Property Claim by Deceased Spouse’s Estate
Importantly, section 16 of the Family Property Act also permits the estate of the deceased spouse to continue an application for family property order. Unlike for a surviving spouse, however, the Family Property Act, does not permit the estate of the deceased spouse to commence an application for a family property order, where the application was not commenced prior to the passing of the deceased spouse.