The bodies of nurse Heather Glendinning and her daughters, Jane Cuzens, 12, and Jessica Cuzens, 10, were found in their Port Denison home, 360 kilometres north of Perth, in December 2011.
Investigating officers described the scene as among the worst they had encountered.
Ms Glendinning was involved in a bitter and protracted custody battle for her children in the Family Court at the time.
An inquest examining the circumstances leading up to the double murder-suicide was held in Geraldton in February and Coroner Barry Paul King handed down his findings on Friday.
Coroner King said despite being affected by severe mental illness, Ms Glendinning was never considered to be a risk to herself or her children.
He said opportunities to try to assess her psychologically were missed "sometimes because of coincidence and sometimes because agencies were unaware of information known to other agencies".
The coroner said one of the themes running through the evidence was that different entities had different information about Ms Glendinning's mental health issues, but none had access to all of it.
He said of crucial importance was the fact the Family Court and the lawyer representing the children were not made aware of Ms Glendinning's contact with the Department for Child Protection.
Coroner King called for the department and the Family Court, including independent children's lawyers, to develop a procedure to share, where appropriate, information relevant to the health and safety of children involved in custody disputes.
Woman unwilling to seek help for mental illness
In his concluding remarks, Coroner King said the primary difficulty in treating Ms Glendinning's depression and psychosis was her unwillingness to engage with mental health services.
A belief that doing so could be used against her in the custody dispute, was accepted as Ms Glendinning's main reasons for not engaging with mental health professionals.
In response, Coroner King recommended the Family Court provide litigants in custody disputes with information indicating how mental illness may be considered by the court.
"At a time when the extent of the wide spectrum mental illness in the community is progressively being recognised and managed, it seems to me to be appropriate and timely for the Family Court to provide information to parties about the way in which mental health issues may impact on their cases," he said.
The inquest found that in 2008, the Family Court requested a psychiatric assessment to determine the suitability of the parents to care for the children, but was told it could not be done.
It was determined that the Family Court did not have the funds or authority to cover the costs of mental health assessments and they were generally paid for by the parent being assessed.
The fact the parents lived in regional areas was also relevant because of the limited availability of psychiatrists willing to conduct assessments of Family Court litigants.
Mother's behaviour erratic in days before murder-suicide
In his third key recommendation, Coroner King called for steps be taken by the State Government to ensure Family Court judges were able to obtain psychiatric reports when required.
The inquest heard that in the days leading up to the deaths, Ms Glendinning displayed increasingly paranoid, delusional behaviour, but did not indicate she intended to harm herself or her daughters.
In his concluding remarks, Coroner King said Ms Glendinning's mental illness had terrible, devastating effects on her life and the lives of her children, their father and connected families.
He said evidence provided to the inquest exemplified how destructive mental illness could be, and how much more needed to be done in an attempt to address it.
The State Government said it was considering the coroner's findings.
Port Denison murder-suicide highlights destructiveness of mental illness: coroner Sarah Taillier July 29 2016