Sadly, it is all over for Kermit & Miss Piggy.
But seriously, there are many implications for breaking up, including superannuation balances? refinancing your loans, selling a home or transferring assets, even down to the detail of looking after your ‘who will benefit from your super when you die?
We offer sensible practical advice to help ease the burden of some of these things if you are like Kermit and Miss Piggy and dealing with unpacking a long term relationship.
The superannuation splitting laws are very specific in how superannuation is treated when a marriage or de facto relationship breaks down.
Step 1: Valuing the superannuation
A request is submitted to the superannuation trustee to value the superannuation entitlement before it can be split. The Superannuation Information Kit available from www.familylawcourts.gov.au contains all of the details and forms needed for the entire valuation and splitting process.
Different methods apply for different types of funds. In most cases, the super fund will engage an accountant to value the fund and may charge a fee to cover the associated costs.
Step 2: Decide the method of splitting
Once the fund has been valued, the size of the two split amounts must be determined. This will be either by agreement between the two partners to the relationship, or by court order.
Reaching an agreement with a former partner enables each member to retain control of their own decisions and can reduce the stress and financial implications of involving the courts. If both parties have reached an agreement, an application for a Consent Form can be lodged with the Family Court.
If no agreement can be reached, the case will progress to court for a determination of how much and in what manner the superannuation will be split.
The fund trustee needs to be kept informed of proceedings to enable it to attend the court hearing and, if required, make an objection under the procedural fairness provision. Once the superannuation order is made, whether by consent or after a hearing, it is important to provide a sealed copy of the order to the trustee.
Step 3: Splitting superannuation
Splitting does not convert superannuation to cash. It remains subject to superannuation laws including preservation and other regulations. One portion is generally rolled over to another account in the same super fund in the name of the “non-member spouse”, or transferred to another super fund altogether.
When a relationship breaks down, it’s likely that your financial circumstances will change. If this could affect you, talk to us so we can assist you through this time.
Give us a call for a no obligation chat 0249411888.