At the end of a marriage or de-facto relationship, the joint property of the parties will be divided through property settlement. Focus tends to be placed on the division of the house, bank savings, and any vehicles. Superannuation is a significant financial asset that should not be left out of your considerations when going through property settlement.
Under Family Law, superannuation (super) is treated as property that can be divided between parties during a property settlement. However, it is treated differently to physical property such as a house. Parties can agree to split their super, but it is not mandatory. It is important to note that the splitting of super does not convert it to cash; instead it will be directed to your super and subject to superannuation laws.
There are several options for how to split superannuation:
- Through a formal written agreement between both parties. A certificate must be signed by the lawyer of each party to state that the parties have both acquired independent legal advice about the nature and implications of the agreement.
- Through a consent order enforceable in court. Before you enter a consent order, you should obtain legal advice.
- Through seeking a court order after initiating property proceedings if an agreement cannot be reached.
The parties’ superfunds will usually need to be involved when splitting supers for property settlement.
Another factor to keep in mind is whether you would like your super to be considered together with the rest of your total asset pool or treated separately when you are before the court. By considering super separately from your other assets, there is potential for a percentage split that differs from the division of the main pool. You need to decide whether this would be more beneficial than obtaining the same split percentage as the rest of your assets.
Including superannuation in a property settlement can add significant value to the property pool. It is especially important where the income of the parties is imbalanced. However, the processes involved in dividing superannuation can be complex and legal advice should be obtained to minimise issues and to ensure you receive a fair outcome. Simply contact us by email at email@example.com or give us a call on 8410 9069.
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Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.