Superannuation – It’s Not Just for Retirement Anymore
When you think about divorce, you probably picture the family home, the cars, or even the furniture getting divided. But what about your superannuation? Yes, your super can be a significant asset in a divorce settlement, and super splitting is often a complex issue. In Australia, superannuation is treated as property, and its division can cause a stir during divorce proceedings. So, how do you navigate the dos and don’ts of super splitting in divorce? With compassionate family law advice, you can ensure a fair and legally sound superannuation division without leaving the courtroom feeling like you’ve lost your shirt (or your super).
Key Takeaways
- Super Splitting is Part of Property Settlement
Superannuation is treated as property in divorce proceedings, and its division needs to be addressed in a property settlement. - Seek Legal Advice Early
Super splitting can be complex; the earlier you get professional legal guidance, the smoother the process. - Super Splitting Isn’t Automatically 50/50
While a 50/50 split might sound fair, the court considers multiple factors, including contributions and future needs, when deciding on the super division. - Get Everything in Writing
To legally bind the super split, ensure the division is formalised through a court order or superannuation agreement. - Don’t Forget Future Growth
Remember, superannuation doesn’t just sit there; it grows. Make sure the division accounts for future growth and interest.
What is Super Splitting in Divorce?
Supersplitting refers to the division of superannuation between two parties following a divorce or separation. In Australia, superannuation is considered property, and just like other assets, it must be divided relatively during property settlement negotiations.
Supersplitting occurs under the Family Law Act, which allows a court to divide superannuation by using several methods, including:
- Splitting superannuation by percentage
- Offsetting super with other assets
- Creating a separate super fund for the other party
Dividing super can be one of the most complicated aspects of a property settlement, so it’s crucial to ensure you have the right legal advice before you start.
The Dos of Super Splitting in Divorce
1. Do Seek Legal Advice Early
The first thing you should do when you’re considering super splitting is to consult a family lawyer. Superannuation rules are complex, and early advice can save you from making costly mistakes. A compassionate family law expert will help you understand how your super is treated, the best methods for dividing it, and how to ensure a fair outcome.
2. Do Understand Your Super Fund Statements
Before you even consider splitting your super, you need to know precisely what you’re working with. That means understanding the value of your superannuation and any potential future growth. Not all superannuation funds are the same, so ensure you get a clear picture of your super balance, including any investment growth or liabilities.
3. Do Ensure a Formal Agreement is in Place
Once the super splitting terms have been agreed upon, ensure everything is formalised. You can do this through a Consent Order or a Binding Financial Agreement (BFA). These documents make the super split legally binding, ensuring both parties uphold the agreement.
4. Do Consider a Superannuation Agreement or Court Order
If you can’t agree with your ex on the division of super, the court can intervene. A formal court order ensures that the super split is legally enforced. Alternatively, you may choose to negotiate an agreement outside of court. A superannuation agreement is a useful tool that allows you to divide super without court intervention, as long as both parties are in agreement.
The Don’ts of Super Splitting in Divorce
1. Don’t Forget to Include Super in Property Settlement Negotiations
A common mistake is to overlook superannuation during the property settlement process. While you might be focused on dividing the family home or assets, remember that superannuation is an asset that should be considered in the overall settlement. If you fail to address it, you could be missing out on what is rightfully yours.
2. Don’t Attempt to Split Super Without Legal Assistance
Trying to handle the division of super without professional legal help is a risky move. Super splitting involves technical legalities, including understanding the value of super and its different methods. If you don’t get the right advice, you might end up agreeing to a deal that isn’t in your best interest.
3. Don’t Assume Super Will Be Split 50/50
It’s easy to assume that a 50/50 split is the default option, but this isn’t always the case. The court doesn’t simply divide assets equally – instead, it considers various factors such as contributions to the relationship, future needs, and the length of the marriage. A fair division doesn’t always mean a 50/50 split, so be prepared for a division that might differ from what you expected.
4. Don’t Delay the Process
Supersplitting is an important part of the divorce process, and putting it off can cause unnecessary complications. Australia has strict time limits for making superannuation claims after separation, usually two years. Delaying the process can reduce your options and prevent you from reaching a fair outcome.
How Superannuation is Divided in Divorce
Superannuation doesn’t have to be divided in a simple 50/50 manner. There are different ways to approach the division of super, and the court will consider several factors before making a decision. Here are the most common methods used to divide superannuation in a divorce:
Different Methods of Splitting Super
- Percentage Split
One of the most common methods is to split super by a percentage. For example, if one party is entitled to 30% of the other party’s super, that percentage is transferred to them. - Offsetting Super with Other Assets
If one person has a significantly larger super balance, they may agree to offset the difference with other assets (e.g., the family home). - Super Fund Split
Another option is to create a super fund for the other party. This method involves transferring a portion of the superannuation balance into a new account in another person’s name.
Each method is designed to ensure fairness and equity, but the division depends on various factors such as contributions, needs, and relationship duration.
Don’t Leave Your Super to Chance – Get Professional Help
Super splitting is an often overlooked aspect of divorce, but it’s important. Whether you’re getting divorced or separated, addressing superannuation in your property settlement is crucial. With the right legal guidance, you can ensure a fair and legal split of your super, protecting your future financial security.
For expert assistance with super splitting and divorce proceedings, Stewart Family Law is here to help. Our compassionate family law team will provide the support and advice you need to navigate the complexities of the superannuation division and secure a fair outcome.
Also Read: The Impact of a Narcissistic Parent on Divorce and Child Custody
