If divorced person dies, what happens to the house?

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Q. Let’s say the condition of a marital settlement requires the sale of a home with most of the proceeds going to one spouse instead of alimony. The house is on the market as required by the settlement. The divorce has been finalized and the last piece left is selling the house and disbursing the funds to the designated spouse who is very ill. What happens if the ill spouse passes away before the house is able to be sold?
— Ex-spouse

A. The answer here is probably detailed within the terms of your matrimonial settlement agreement.

Most divorce agreements have a clause similar to, “This Agreement shall inure to the benefit of both parties’ heirs and assigns forever and shall be binding upon said parties, their heirs and assigns forever,” said David Carton, a matrimonial law attorney with Mandelbaum Salsburg in Roseland.

“What this clause means is that if a party dies and they have a right or entitlement to something of value, their estate would then stand in their shoes and receive it in their place,” he said. “Said another way, if the ill spouse received the house proceeds, put the money in the bank and died the next day and their will provided that his or her sister would receive the entirety of their estate, the sister would effectively receive all of the house proceeds.”

Similarly, Carton said, if the ill spouse died the day before the house was sold, why wouldn’t her sister still be entitled to the proceeds?

Carton said the ill spouse will have an estate under the law of intestate succession even if they do not have a will at the time of their death.

Pursuing this claim may involve the estate instituting legal action against the ex-spouse, but there would be viable claim, he said.

“In this case, the issue is not the payment of alimony, which would normally terminate upon the death of either spouse,” he said. “Since the divorce agreement provides for an alimony buyout, the buyout is an asset and a party dying or even remarrying does not affect the buyout.”

As long as the ill spouse is of sound mind, she or he should certainly execute a will so that there is no dispute as to who he or she wants to receive the assets of their estate, Carton said.

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This story was originally published on June 24, 2019.

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