Take care when settling on your super solution
A DIVORCE from your husband or wife, or a separation from your de facto, normally results in a division of your assets and debts, whether they’re held separately or together, and accumulated superannuation is no exception.
Even if one of you hasn’t contributed to superannuation for many years, that person could still be entitled to a percentage of the other’s super.
A superannuation agreement can be put in place before, during or after your relationship, as part of a broader “binding financial agreement”.
This agreement can specify how super is to be split upon separation or divorce.
If you can’t come to an arrangement together, you might instead look to obtain financial orders, under which a court hearing will determine how the super is to be split between the two of you.
Because there are rules around when super can be accessed (for instance, you may need to have retired from the workforce), remember that splitting super won’t necessarily result in an immediate cash payout. Super is treated differently to other assets and debts.
Depending on your circumstances, you may also wish to establish a “flagging agreement”, whereby the super fund is prevented from paying out any super until the flag is lifted, which may also result in a fee.
O Once the super-splitting order is made, whether by consent or after a court hearing, you’ll also need to provide a copy of the order to the super fund for it to be effective.
Some people prefer to avoid lengthy and stressful disputes by choosing to forgo some of their entitlements and get it over with. However, the trouble with doing this is that it may have significant financial consequences down the track, so it’s important to be armed with all the information you can to ensure the decisions you make are sound.