Many couples hold a large part of their assets in an SMSF, together in a family fund or separately from each other.
The Family Court can ‘divide’ or adjust your superannuation interests between you and your ex, like any other property.
For example, the person with less superannuation overall, may be entitled to a part of their ex’s superannuation such as a share of what was built up while they were together.
Superannuation interests (of all types, including in an SMSF) can only be transferred between you and your ex under a specific legal process in family law.
Otherwise the superannuation fund is not compliant with the law and the fund or either of you may incur taxes and penalties from the ATO.
At Counsel Family Lawyers, we frequently see clients who have dealt with their SMSF assets as part of financial separation, by directing their accountant to deal with substantial assets, before the client has received family law advice. The SMSF becomes non-compliant and fixing it can cause significant financial consequences and can needlessly result in a dispute between you and your ex if not handled carefully.
To divide property with your ex, you may wish to do one or more of the following:
- Remove one spouse from the SMSF if you both have an interest in it;
- Wind up the SMSF if neither of you want to maintain the existing SMSF;
- Roll out your or your ex’s interest to another superannuation fund (‘roll out’); or
- Transfer part of your superannuation to your ex, or have them transfer a part to you (‘splitting’) to create a new interest in the SMSF which can then be rolled out.
- All of the above requires family law advice.
Counsel Family Lawyers can advise you law before implementing any changes to your SMSF as part of a separation with your ex. We can advise you on your entitlements and the required legal process to meet your objectives, and work with your accountant and financial advisor to ensure that dealing with your SMSF, if agreed, is part of a prompt, fair and amicable financial separation from your ex.
If you need further advice about dealing with your SMSF, you should contact our office to make an appointment well prior to making any arrangements with your accountant and/or financial advisor for the actual superannuation split. Please contact our office on 9320 3900 or email [email protected]
The information in this blog does not constitute legal advice and cannot be relied upon by you. If you require advice specific to your situation you must contact Counsel Family Lawyers for legal advice. The contents of this blog are relevant as at 10 July 2017. We recommend you obtain specific advice relevant to you and your family situation.
Written by James Moore
