Choosing to split superannuation is one of the decisions parties have to make when dividing assets following separation or divorce. While this can be a difficult process to go through, it is essential for ensuring both parties have the assets they need to maintain their standard of living in the future.
A party's superannuation fund is treated as an asset forming part of the property pool available for distribution. A few very specific rules exist that will only apply when dividing superannuation.
There are three different options available to parties who are looking to split their superannuation. These are:
1) Entering into a formal legal agreement. Both parties can come to a binding agreement regarding their property without the involvement of the courts. This will require each party to obtain an independent legal advice prior to signing the agreement, confirmed by their lawyer's written statement that such advice has been provided.
2) Seeking consent orders. Parties can also seek the splitting of their superannuation entitlements as part of their application for Consent Orders, to achieve a just and equitable division of their overall asset pool. To do this, the parties will have to reach an agreement and then seek consent orders from the court in the terms of their agreement with respect to the overall property settlement and, specifically, the splitting of the superannuation entitlements of one of the parties.
3) Court proceedings. The last resort for those who are unable to agree on the split for their superannuation is to apply to court for orders that would set out the exact division of their respective funds. As with all financial disputes in family law, the court will consider the financial and non-financial contributions of both parties and their future needs in reaching a decision with respect to the parties' respective superannuation entitlements.
Before the parties undertake steps to pursue any of the three options set out above, they will need to provide reciprocal disclosure to each other of their superannuation interests as at the time of property settlement, whether it's obtained by agreement or ordered by the court. In some cases, a special actuarial valuation of such interests may need to be undertaken by a superannuation expert.
IIf you are considering a separation or divorce and need advice regarding the division of your superannuation, make sure to instruct a family lawyer as part of this process. Regardless of the avenue you pursue to split this asset, they will be able to advise on the different requirements and give your case the best chance of success.