Superannuation is a tax structure in Australia that is aimed at motivating people to save for their own retirement. Superannuation and separation can be very complex. One of the several questions that arises when a couple is seeking a divorce or are already divorced (in some cases) is ‘what will happen to my superannuation when I separate?’.
Superannuation is treated as part of the marital assets that are shared during the property settlement. It can be a major portion of your total assets, which is aimed to help fund a more comfortable retirement for you. Since it is usually very significant, no wonder it is among the most sought-after assets. Of a truth, the issue of how to divide the interests on superannuation has been a major concern in the event of marriage breakdown. And due to the specific treatment of superannuation, it is therefore essential to understand the processes involved in dividing and transferring superannuation interests.
There are quite a number of relevant factors that will have to be considered when trying to divide superannuation interests. They include, but not restricted to:
- The superannuation held by each spouse when the marriage started
- The number of assets each spouse brought to the marriage
- The current property and interest on the superannuation
- The duration of the marriage
- The contribution of each spouse during their marriage, both direct and indirect etc.
Dividing superannuation upon relationship breakdown
There are basically two basic ways of deciding how the superannuation of a separating couple will be shared. These are;
Through court orders: This comes in place where there is no binding agreement. The superannuation interests may either be divided with the agreement of the spouses or the family court may make an order dividing the interests of the superannuation as part of a judgment resolving a dispute. There are some factors specific factors about superannuation that the Family Court will consider. For a comprehensive detail, consult a reliable legal adviser.
Superannuation agreements: This agreement allows separating couples who could reach agreement on a property split to do so without the delay, cost and the emotional toll of going to court. It can be made before, during or after a relationship. It sets out how the property of a couple, plus their individual superannuation interests will be divided should there be a separation.
Usually, it is economical and less stressful if you and your ex/spouse can agree on how the superannuation interests should be divided without the need to go through the Family Courts. It also important you consider any taxation effects of the anticipated dividing orders once you both have reached a consensus.
Separation is in no way easy; it can be financially and emotionally devastating. Considering the financial consequence and complexity of superannuation division, it is recommended you consult an expert legal adviser to receive legal and financial advice about superannuation sharing. Our lawyers at Armour & Allen are certified Family Law experts who can advise you on all your legal options as far as superannuation and separation is concerned to ensure your retirement is secured. For further information, do not hesitate to contact us. We also offer a first interview free at no cost and no obligation.