In Family Court property settlement disputes, a spouse’s interest in a Superannuation Fund must always be identified and valued.
However, there is no necessity for that interest to be split and there are different ways in which a Court can treat a party’s interest in a superannuation fund.
In some situations the Court may find that it is not just and equitable to make any alteration of any party’s interest in property or superannuation. In other words, no adjustments are made to any existing legal or equitable interest that either party has in property. This can sometimes occur because of the principles laid down in the High Court decision in Stanford’s Case.
In other situations, typically long marriages where assets have been intermingled and each party has made substantial contributions, the contributions to each party’s superannuation interests are considered as part of the overall contribution analysis. This may or may not result in the Court making a Splitting Order to split a part of one party’s superannuation interests to the other.
In other cases, contributions to superannuation are assessed separately to contributions to other assets. This typically occurs in matters where “an asset by asset” approach is taken to the assessment of contributions. In those cases once again, there may or may not be a superannuation split, depending upon the individual assessment of contributions by both parties to their respective superannuation funds.
Importantly, before assessing whether a superannuation split is necessary or not, it is essential to identify the nature and type of a party’s superannuation interest. Once that is done, one can examine the effect of any proposed Orders and consequences of any superannuation split that may or may not be in the client’s best interest.