Superannuation for the purposes of family law is something that is often forgotten by parties until meeting with their lawyers. Super is considered to be an Asset for the purposes of Family Law, however it is considered a “different species” of asset on the basis that it is usually not accessible by parties until they reach their preservation age as set out in the trust deed of their super fund. Further, where superannuation is important is in the consideration of the tax implications of property settlements.
Superannuation is treated differently for tax purposes with tax benefits that are available to parties. Recent changes to superannuation announced by the Federal Government will impact parties that are separating as there are new lifetime and annual limits that apply to the tax benefits available to parties. Ensuring you have the right advice from your lawyer and your accountant is important before finalising an agreement.
Super can take the form of an Accumulated Fund (being the most common form of fund), a Self Managed Fund, or a Defined Benefits Scheme. Each of these types of fund comes with their own unique challenges that are in turn important to consider as part of a property settlement.
Superannuation can be transferred between parties as a result of a property settlement under the Family Law Act and are considerations when determining the overall percentage adjustments that a Court will Order (or will be documented in a Financial Agreement).