When a couple separates, everything that has been accumulated throughout the duration of their marriage has to be divided. There are laws to guide and regulate how everything is to be divided between parties. When it comes to dividing superannuation accumulated during the marriage, this law is known as the ‘Superannuation Splitting Law’. The superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation and split superannuation payments, although this is not mandatory.
Splitting does not convert it into a cash asset – it is still subject to superannuation laws (for example, it is usually retained until retirement ages are reached). This is because superannuation is different from other types of property as it is an asset that is held in trust. Therefore, the superannuation trustee controls the assets of the superannuation fund making the process to transfer, divide or adjust superannuation slightly different to the process adopted for assets such as bank accounts, cars or real estate.
The process to split superannuation begins with obtaining valuation information. This involves providing forms to the trustee of the superannuation. It is important to note, that the couple must tell the trustee about the orders they are seeking. The trustee must have an opportunity to consent/object to the orders that you are seeking. From this, the separating couple needs to decide a method of splitting as mentioned above. The last step to legally split superannuation, parties may either enter into a formal written agreement, seek consent orders by consent of both parties through filing an Application for Consent Orders to the Federal and Family Court or seek a court order as a result of a Court Hearing. The route that a separating couple chooses to take should be decided based on legal advice and their own boundaries or preferences.
Splitting superannuation can be a complicated and arduous process. However, it can be made easier through consulting an experienced family lawyer who can help you better understand the process and any information.
If you or someone you know wish to discuss this issue further, then please do not hesitate to contact us on 02 8999 9809.