Divorce, separation and family breakdown are a stark reality for many Australians, with 1 in 3 couples deciding to split.
Along with the emotional complexity of the situation, untangling your life from each other isn’t easy. From child support, property settlements and the finances, the decisions you make during this time will affect both your and your former partner’s financial future. The long term financial impacts can be very significant.
Superannuation is one such asset that forms part of the property settlement. Often, one party isn’t aware of the other party’s superannuation balance, or one party has a very little superannuation. This is a common situation for women who left the workforce to raise children. Younger couples who separate or divorce don’t value their superannuation or their retirement options as much as those closer to retirement age.
Your superannuation could be one of the largest assets of the relationship and it’s important that it’s factored into any agreement.
Couples can make a Superannuation Agreement on how their combined superannuation will be split. This can be done before, during or at the end of their relationship. It’s like a financial agreement, however, superannuation has special rules as it’s subject to the superannuation laws. It’s important to realise that superannuation splits can not be converted into cash.
There are many guidelines for how it’s best to separate your assets (including superannuation). These are based on the income and assets each partner brought to the relationship, how much you have both worked outside and inside the home as well as child arrangements moving forward after the separation.
Some possible approaches to dividing your superannuation include:
A lawyer can assist you with the best options for your individual situation.
If you are going through a separation or divorce, one of the first and most important steps is to understand your current financial situation. It’s worth spending a few minutes to find any lost superannuation. Camori Investments offers a free find my superannuation service which will help you find lost or forgotten superannuation.