Prior to the introduction of Part VIIIB of the Family Law Act in 2002 Courts were unable to treat superannuation as anything other than a financial resource that would vest in one party at some future date.
Since the amendments to the Family Court Act came into effect, superannuation has been treated as property under the Family Law Act and can be split by way of Court Order of Superannuation Agreement by applying to the trustee of a superannuation fund. However, Self-Managed Superfunds (SMSF’s) are not your usual super fund. They are exempt from the methods prescribed in the Regulations and members of a SMSF’s are often also the trustees.
SMSF funds provide more investment options than any other super fund and allow a member to invest in a range of assets including property, shares, and bank deposits. Whilst there are prescribed methods and formulae for the valuation of most superannuation funds, there is no prescribed method to value a member’s benefits in a SMSF which means parties can essentially agree to the value of the SMSF by reviewing the individual assets and liabilities of the fund and determining their value at the relevant date. If for example the parties cannot agree to the value of an item of real estate held in the SMSF an independent property valuation can be obtained.
There are a number of ways parties can action a split of a SMSF including:
- Splitting the assets held by the SMSF
- Selling the assets held by the SMSF (noting CGT liabilities may be realised) and splitting the proceeds
- A combination of the above.
Contact Swan Family Lawyers on 8221 7020 for more information relating to SMSF splitting.