What Role Does Superannuation Play in Divorce Settlements?
There is nothing straightforward about facilitating a divorce. In some cases, you might even have to deal with the addition of a superfund transfer. When embarking upon your financial settlement, work closely with your family solicitor to clarify the complications that may arise with superannuation funds.
The Process of Settling Superannuation in Divorce
Your financial settlement is a combination of debts, assets, and economic interests—that includes superannuation. Experts will calculate this settlement according to asset values and liabilities upon separation.
Whether you are in a self-managed super fund or under an industry, retail, government, or corporate arrangement, you’ll have to provide a statement of balance to the opposite party to prove the value of your superannuation. From there, you’ll receive mediation regarding the settlement.
Why You Should Prioritise a Fast Divorce
Every time you protract a negotiation, the value on assets and liabilities can fluctuate. With every delay, you’ll have to update your statement to ensure that the balance sheet remains accurate and correct to the date of negotiation.
If there is debt in the relationship, the former couple can decide to split this amount down the middle and distribute a portion of the superannuation.
How Does Superannuation Distribution Work?
If you agree to a superannuation split, you aren’t likely to receive the funds in cash. Additionally, if you aren’t of retirement age, the super transfer will occur between two super fund accounts.
Overall, you aren’t going to benefit from a super transfer in the short term if you aren’t of retirement age. After all, the point of superannuation is to provide an alternative source of income as you mature.
The Transfer of Superannuation Funds
To transfer superannuation funds, you’ll need a court order, which must be sealed and signed. Then, you’ll have to provide a copy of the order to the entity overseeing the transfer of funds. Before approval, you’ll also have to fill out a form as nominated by the super fund entity.
Always review your beneficiaries to ensure that they’re who you want them to be. Update your information as necessary.
Accessing Cash in Your Super Fund
When in the middle of a divorce, you can rest easy knowing you aren’t going to lose all—if any—of your superannuation. While it’s entirely possible to lose as much as half the amount, your super fund account (or SMSF) will remain active.
If you’re experiencing financial hardship, contact the ATO directly or work with your family lawyer to determine how and when you can receive early access to your superannuation.
What About Self-Managed Super Funds?
Ownership regarding Self-Managed Super Funds (SMSF) is dependent on relevant contributions and how these funds perform in investments. As an asset, they are similar to ordinary super funds that you run through an investment company.
The financial aspect of divorce can be just as stressful and overwhelming as the divorce itself. Thus, it’s best to familiarise yourself with the superannuation process so as not to make any decisions you’ll potentially regret.
If you’re going through a divorce and need the help of an experienced family solicitor, tap one of our experts at Springfield Legals. Our professional team can oversee every phase of the process and ensure the least possible friction between both parties.