25 Apr Superannuation Division
Superannuation can be a component of a property settlement which causes problems between the parties. Often one party’s super balance is as large if not even larger than the non-superannuation assets available for division.
On the one hand the person with the superannuation usually wants to hold onto it (or as much of it as they can) as their nest-egg for retirement. On the other, the cash assets represent a far more attractive “give me something now” alternative to super.
Sure, there are significant advantages either way, including the tax advantages of holding a large superannuation balance, and having property or cash is better in terms of creating a passive income stream and reducing expenses in the shorter term.
In our experience, whenever superannuation balances are over about $100,000, that’s when they become an issue. Where parties have comparable balances under that amount, it’s almost always a “keep what you have” arrangement with super and not further discussed.
As superannuation can be split between the party’s super funds as part of a settlement, it makes settling much more manageable, given the super balances can be adjusted as part of the terms of division of assets.
Although it does create a slight delay in the settlement documents being ready to sign, as the super fund needs to review any draft Order before the Court will finalise the matter, this is a process that takes 28 days or in the case of the vast majority of funds, far less.
We regularly split superannuation portfolios, including self-managed funds, as part of negotiated or already agreed settlement terms.