When married or de facto couples decide to divorce, the division of their superannuation accounts can be one of the most difficult assets to divide. It can also be the asset that creates the most animosity between the couples. Therefore, splitting superannuation after separation is something that requires the assistance of family lawyers.
Experienced lawyers can guide and inform both parties on how the superannuation will be handled and divided in their divorce settlement.
Divorce and superannuation entitlements
Following a de facto or marriage separation, ex-spouses are entitled to superannuation. However, before any superannuation monies can be divided, an accounting must occur to obtain a full and accurate valuation of the superannuation accounts involved.
Thereafter, the amount each party is entitled to will vary depending upon a number of factors.
What happens to superannuation in a divorce?
As the Family Law Act of 1975 treats superannuation funds as property, it will be divided like the other assets during the property settlement.
Learn more: dividing assets in divorce
de facto property settlements
How is superannuation split in a divorce?
If the parties can agree, superannuation can be split between them in accordance with their own distribution choices. However, this is rarely the case. Instead, most couples require the assistance of the court to assist in splitting superannuation after separation.
The funds will be split based on a number of factors, including:
- Length of the marriage
- Status of the accounts
- Origination of the accounts
- Employment status (and income earning capacity of the parties)
- Age and timing of retirement
- Children of the union and the ongoing financial commitments of each party
- Each person’s ongoing financial needs and responsibilities
- Each parties’ contributions to the marriage, both financial and otherwise
Once division of the superannuation funds is decided, the parties will need to contact the trustee of the fund and request the fund be split and forwarded to the other party. The trustee will then either agree or object to the division, which may require an appearance in court.
If the division is met with agreement, then the trustee will divide the superannuation in accordance with the court order.
Is super split 50/50 in a divorce?
No. Splitting superannuation after separation involves looking at a number of factors, not just dividing it in half.
Do you need a court order to split superannuation?
To effect a split of your ex-partner’s superannuation, you must first write to the trustee of the superannuation fund and advise them that you are seeking superannuation splitting orders. The trustee will then have an opportunity to object to the superannuation orders by writing back to you or attending the court hearing (if any).
Once the Court has made the superannuation order, parties must provide the Orders to the trustee of the superannuation fund to implement.
Can I use my super to pay out my ex?
Superannuation must be transferred from one superannuation account to another to avoid tax implications. As such, it cannot be used to make spousal maintenance or child support payments.
However, it is possible to come to an agreement where one spouse keeps the family home as their personal asset in its entirety, while the other spouse keeps the entirety of a superannuation fund.
This type of compromise would need to be entered into willingly and with full knowledge of the ramifications. However, if the values are equivalent and the divorcing couple are in agreement, it could be a viable arrangement. It’s advisable you speak to a property settlement lawyer before agreeing.
How long do I have to split superannuation following a divorce?
Superannuation funds must be reconciled within a specific period of time after the couple divorces. If the couple has not yet officially received a divorce order, then a request for the accounting and division of superannuation funds can occur any time after the couple has separated.
If the couple has received their official Order of Divorce, then a claim for the accounting and distribution of superannuation assets must occur within 12 months of the issuance of the Order.
The time limit for splitting superannuation after separation for de facto couples is slightly different. In this circumstance, a request for the division and distribution of superannuation must be made within two years of the couple separating.
What happens to a self managed super fund in a divorce?
A self-managed super fund is where parties invest their private superannuation on their own and/or with the assistance of a financial advisor or an accountant.
The couple may have invested in a variety of growth opportunities including real property, stocks, bonds or other investments that have increased the value of the self-managed fund.
Under these circumstances, the various aspects of the self-managed fund need to be valued. Once the fund is valued, it can be distributed to the parties using the same factors as any other superannuation fund.
Get help splitting superannuation after separation
Experiencing a marriage or de facto relationship breakdown can be stressful, especially when it comes to splitting superannuation after separation. At Owen Hodge, we’re here to help you navigate divorce settlements and superannuation splits. Get in touch with our family lawyers today on 1800 770 780.