How Superannuation Lawyers Help Navigate Family Law and Divorce
How is Superannuation treated in Family Law
Superannuation is a type of retirement savings fund that most working Australians contribute to throughout their careers. Under the Family Law Act 1975, superannuation is treated as property during the separation of a marriage or de facto relationship. However, it is considered a unique form of property, with different rules compared to other assets.
When a relationship ends, superannuation splitting laws allow couples to divide their superannuation entitlements. This process—known as a superannuation split—can play a crucial role in the overall property settlement, especially as super balances are often one of the largest assets couples hold.
Although it might not feel immediately important, overlooking your super during a divorce or separation can significantly affect your financial future, especially at retirement. A well-considered divorce superannuation split ensures a fairer and more stable outcome for both parties.
Importantly, superannuation cannot be divided through an informal agreement. It must be addressed legally through either a Court Order or a Superannuation Agreement, which may form part of a Binding Financial Agreement.
If you’re navigating divorce and superannuation, it’s essential to seek advice from experienced superannuation lawyers. With the right legal guidance, you can ensure your entitlements are protected and the process is handled correctly.
What is a Superannuation Split
A superannuation split involves transferring part of one person’s superannuation to their former partner as part of a property settlement after separation. The funds stay within the super system and are not paid out in cash. Access remains restricted until retirement age, unless early release is allowed under specific conditions. Superannuation splitting can be complex, so it’s important to get advice from experienced superannuation lawyers to ensure everything is handled correctly.
Valuing Superannuation in Family Law
Understanding the type and value of a superannuation interest is essential when considering a superannuation split during divorce. In some cases, it’s not as simple as referring to the latest super statement. For instance, defined benefit funds may include a lump sum, a lifetime pension, or both, making valuation less straightforward. In these situations, expert input may be needed to assess the interest properly. Engaging superannuation lawyers can help ensure the valuation is accurate and that the asset is fairly addressed during the property settlement.
How Courts Decide Superannuation Splits After Divorce
There’s no fixed rule for dividing superannuation after a separation. Unlike other assets, there’s no automatic 50/50 split, and no guaranteed entitlement. In family law, each case is assessed individually, with the court deciding whether a superannuation split is appropriate and, if so, how much should be divided. The outcome must be just and equitable based on the specific circumstances.
Several factors can influence the division of superannuation:
The length of the relationship
The current balance of each party’s superannuation
Superannuation balances at the start of the relationship
Whether one party had limited opportunity to grow their super, such as being the primary carer for children or managing the household
The size of the overall property pool and the proportion made up by superannuation
Differences in income and future earning potential
In a divorce, superannuation lawyers can help ensure that your entitlements are accurately assessed and that superannuation splitting reflects the full picture. Courts generally avoid outcomes where one party retains the majority of accessible assets, while the other is left with mostly superannuation, since super is not usually available until retirement, subject to fund rules and eligibility.
What if My Ex Won’t Disclose Their Superannuation?
In family law matters, both parties have a legal obligation to provide full and frank financial disclosure, which includes superannuation interests. If your ex-partner is not forthcoming with this information, there are steps you can take to obtain the necessary details regarding their superannuation.
If you know which super fund your ex-partner is with, you have the right to request superannuation information directly from the fund. This can be done by submitting a declaration and completing the required forms. You do not need your ex’s consent to do this, as you are eligible to apply for this information as their spouse.
If you are unsure of which super funds your ex-partner holds interests in and court proceedings are underway, you can request information directly from the Australian Taxation Office (ATO). This information will be provided through the court.
Self-Managed Superannuation Funds
If you are a member of a self-managed superannuation fund (SMSF), the same superannuation splitting options apply as with other funds. However, matters involving self-managed super funds can be more complex and may require the assistance of a qualified expert, such as an accountant, to accurately value the fund.
In some cases, the sale of assets, such as property, may be necessary to facilitate the division of the superannuation interest and transfer or rollover of the entitlements.
It’s also important to ensure that your SMSF is compliant with its obligations. If assets are being sold to facilitate a superannuation split, you must consider any tax implications involved. We often work with accountants and tax specialists to develop strategies that minimise tax liabilities and ensure the best possible outcome for your situation.
Our team is lead by an Accredited Specialist in Family Law, Ashleigh Wisbey. Our empathetic and compassionate approach ensures you're not just another case but a valued client deserving personalised attention. Our intricate understanding and expertise in asset division, including superannuation, guarantees that you are well informed and confident in your financial decisions. Not only are we experts in all things family law, we are personable in our approach.
If you're looking for a comprehensive solution to your asset and financial division needs, your search ends with Seacliff Family Law. We're with you every step of the way.
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