Saving for retirement should be a priority for all working Australians. Everyone wants to be able to maintain their lifestyle and enjoy their retirement. That's why superannuation is one of the most important assets you can have.
That's also why superannuation is often one of the biggest concerns that people have when they go through a separation.
Here is an introduction to how your superannuation is treated during a divorce and what can happen to it.
What happens to superannuation after a break up?
Superannuation is treated as part of the pool of marital assets that get divided during the property settlement.
Your superannuation may be a significant portion of your assets and, especially as people approach retirement, it is one of the most sought after assets. For this reason, it is common for a separating couple not to agree about how the superannuation and other assets should be divided.
Depending on your situation, you may need to seek advice from experts in taxation law, property law and accountancy.
What will be taken into consideration?
There are many relevant factors that will need to be taken into consideration when trying to work out a settlement.
- The amount of property that each party brought to the relationship.
- The superannuation held by each party at the start of the relationship.
- The property and superannuation interests held now.
- The contributions, both direct and indirect, which may have been made by either party during the term of the relationship.
- The expenditure made on behalf of either party during the term of the relationship.
- The obligations and responsibility of either party to any member of the family during the period of the relationship. This includes the capacity of homemaker or parent.
- The length of the relationship.
This information will be used to determine a way of splitting the superannuation in a fair and reasonable manner.
If you are able to come to an agreement with your former spouse or partner on how to split the super, then you can enter into a formal written agreement or seek Consent Orders from the Court. If you cannot agree with your former spouse or partner, then the matter will be heard before the Court.
How are marital assets divided?
If you cannot agree on how to divide your superannuation, then the process for dividing them will be much the same as that for dividing the other assets of the relationship. Although it is almost always cheaper and less stressful to come to an agreement with your former spouse or partner without going through the Courts.
Typically, you will need to attend family dispute resolution before getting property and financial orders through the Family Court or Federal Circuit. Following this, the Court will decide how to divide the assets of the relationship in a way that is just and equitable based on the evidence and unique facts about your case.
There are also some factors that are specific to superannuation that the Court will take into account. These include:
- Whether or not you or your former spouse or partner have already retired.
- The value of each person's superannuation.
- How other assets are divided, for examples, the family home.
The way in which your superannuation will be divided will depend on your situation and circumstances. Always get professional legal advice for more information about how the law applies to your situation.
Get expert legal and financial advice
Going through a separation is never easy. It can be devastating emotionally and financially. So if you separate from your spouse or partner, you need to make sure that all of your financial assets are protected so that you can enjoy your retirement.
The best way to do this is to seek expert legal and financial advice. At Rose Lawyers, we will advise you on all your legal options so that you can secure your retirement. Our family lawyers will make sure that your legal and financial interests are protected.
For more information about your options, call Rose Lawyers on 03 9878 5222.