Your Legal Rights When a Terminal Illness Affects Property Settlement

Navigating property settlements under the Family Law Act 1975 (Cth) can be complex—especially if you’ve been separated for some time and your former spouse is now diagnosed with a terminal illness. This scenario raises both legal and emotional questions about entitlements, responsibilities, and timing.

Time Limits and Exceptions:

Under the Family Law Act:

• Married couples must apply for a property settlement within 12 months of divorce.

• De facto couples must apply within 2 years of separation.

However, the court has discretion to grant leave to apply out of time if it’s satisfied that hardship would be caused if permission is not granted.

Impact of a Terminal Illness:

A terminal illness can be considered a "future needs" factor under section 75(2) of the Act. The Family Court takes this into account when deciding how property should be fairly divided.

In the case of Whitford & Whitford [2020] FamCA 350, the court allowed a husband to bring an application out of time due to his wife’s deteriorating health. It was determined that not allowing the application would cause significant hardship, especially given that the property in question had increased in value and no final agreement had been reached.

Children’s Rights:

Even when parents are separated, both retain a legal obligation to support their children. If one parent becomes terminally ill:

• Child support may be reviewed, particularly if income and ability to work are affected.

• Wills and guardianship should be revisited to ensure children’s future care and inheritance are protected.

In many cases, the Family Court will prioritise the children’s welfare when making financial and custodial decisions—especially if one parent may soon be unable to contribute.

Practical Steps to Take Now:

1. Seek legal advice immediately—especially if your spouse is ill and property settlement has not been finalized.

2. Document all contributions (financial and non-financial) you’ve made to the relationship and property.

3. Consider estate planning issues such as updating wills, guardianship nominations, and powers of attorney.

4. Request mediation or initiate proceedings before time limits fully expire (or seek court leave if they have).

Conclusion:

A terminal illness adds urgency and complexity to unresolved property matters. While the law provides flexibility in exceptional circumstances, acting promptly and with legal guidance is crucial. Both your rights and your children's future can still be protected—even after separation.