When couples separate, a property settlement is one way of determining who owns what assets. This can be straightforward when the assets are clearly defined – such as a house, car, or income. However, assets like superannuation are less clear, and need to be carefully considered.
Types of Superannuation
There are a number of superannuation schemes that have different characteristics. For example, many public servants have what is called a defined benefit, so that when they reach a certain age they will receive either a pension or a lump sum which is preordained. Other people have what we call contribution schemes, in which both themselves and their employers contribute to their superannuation fund over time. Eventually, they will receive back what has been contributed, as well as any interest that has accrued on the fund.
How Does Separation Impact Superannuation?
When you are contemplating a property settlement, it is most important that you try and give your superannuation interest a value. It is sometimes necessary for that interest to be valued by an expert to give it a figure that can be added to the asset pool for division amongst the parties.
In some circumstances, sums of superannuation may be transferred between the parties to a property settlement. For example, if one party has no superannuation, perhaps because they do not work, the property settlement may order that a lump sum from the other party’s settlement be transferred into a new scheme for the first parties benefit.
In other instances, a ‘flag’ can be placed on one party’s superannuation fund. When that party retires, and withdraws their superannuation, an agreed upon lump sum is automatically paid to the other party, rather than the person in whose name the fund is recorded.
When dealing with superannuation, it is crucial for people to understand that it must be taken into consideration in a property settlement. Property settlement and family law proceedings can often be complex. If you would like further information regarding property settlements or if you have any general family law enquiries, please do not hesitate to contact one of our experienced solicitors on 9963 9800 for a confidential discussion or via our contact form.
Property settlements can be very complex, get legal advice
When dealing with superannuation, it is crucial to understand that it will be taken into consideration in a property settlement. Property settlement and family law proceedings can often be complex. If you would like further information regarding property settlements or if you have any general family law enquiries, please do not hesitate to contact Etheringtons Family Lawyers in North Sydney on 9963 9800 or via the below contact form for a confidential discussion.