Superannuation splitting is an important aspect of the separation process, especially as this will constitute one of the largest assets an individual is likely to hold. For those who are approaching retirement or have already retired, how their superannuation is split will also have a significant impact on their ongoing standard of living.
For legal purposes, superannuation is treated as a unique asset and therefore splitting it will take a different form compared to other common assets that a couple might hold. Because superannuation can't be accessed until retirement either, it can also create issues as it cannot be converted into cash easily, compared to real estate for example.
This means that superannuation will often need to be split in order to ensure both parties receive a fair share of liquid assets as well as long-term investments.
One of the most important aspects of splitting a superannuation is to value it. While there are legislative requirements for this valuation, there are also exceptions which can further complicate this process, such as self-managed superannuation funds.
Either way, it is advisable that individuals who are beginning the process of valuing their superannuation to seek legal advice, as this process can be difficult to navigate.
There are three options for those who are seeking to split their superannuation. These are:
- Both parties enter into a financial agreement that lays out how this asset is split. For couples who are drafting a financial agreement for all the assets they jointly possess, superannuation will need to be included here. This agreement doesn't need to be authorised by the courts.
- Individuals can seek consent orders to make a prior financial agreement legally binding by applying through the courts.
- Finally, if the parties cannot agree on the best distribution of their superannuation, either party can seek a court order which will detail exactly how this asset will be split.
If individuals do pursue the option of court orders, it is necessary to inform their superannuation provider so the trustee of the fund has the opportunity to attend the hearing if they so choose.
With superannuation splitting representing such a significant part of the separation process, and one that is subject to unique legal requirements, it is important to seek legal counsel from a family lawyer. This advice will be essential for ensuring a positive outcome from this transition.