Divorce is a difficult and emotional process, but it is important to consider the financial implications of the separation. One area that requires careful attention is superannuation, as it is often one of the largest assets that a couple has accumulated during their marriage. If you are going through a divorce, it is important to understand how to split your superannuation and ensure that you receive your fair share.
Understanding the Superannuation Split
Splitting your superannuation after a divorce involves transferring a portion of your superannuation to your former spouse. This is known as a “superannuation split” and is regulated by the Family Law Act 1975. The split can occur either by agreement between the parties, or by court order if an agreement cannot be reached.
The Superannuation Information Form and Agreement
To initiate a superannuation split, you and your former spouse must complete a superannuation information form and a superannuation agreement or court order. These documents will outline the amount of superannuation to be split and the method of payment.
Payment Split vs Flagging Arrangement
There are two main methods of splitting superannuation: a payment split and a flagging arrangement. A payment split involves transferring a lump sum or ongoing payments to your former spouse’s superannuation account. A flagging arrangement, on the other hand, involves setting aside a portion of your superannuation benefits for your former spouse, which will be paid out when you retire or meet another condition of release.
Seek Professional Advice
When considering a superannuation split, it is important to seek professional financial and legal advice. This can help you understand the tax implications of a split, as well as any other potential financial consequences. For example, a superannuation split may impact your retirement plans, so it is important to consider how it will affect your future income and lifestyle.
Requesting a Superannuation Split
It is also important to note that a superannuation split is not automatic, and must be specifically requested. If you do not request a split at the time of divorce, you may lose the opportunity to do so in the future.
In conclusion, splitting your superannuation after a divorce requires careful consideration and planning. It is important to seek professional advice and understand the potential financial implications of a split. By taking the time to carefully plan your superannuation split, you can ensure that you receive your fair share and are able to achieve your retirement goals.
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