Superannuation is often one of the larger assets in a separation, and for a business owner it can be tied up in a self-managed fund that also holds property or business assets. For de facto couples in Western Australia, the way superannuation is treated on separation has changed, so it is important to understand the current position rather than rely on what used to be the case.
Superannuation is treated as property
In a family law settlement, superannuation is treated as property and can form part of the asset pool. It can be split between partners as part of an overall settlement, either by agreement or by court order, rather than being set aside as untouchable. How much is split depends on the wider division of assets, each partner’s contributions and their future needs, so a superannuation split is best considered alongside the rest of the settlement rather than in isolation.
The position for WA de facto couples
Western Australia has its own family law framework for de facto financial matters, and the way de facto superannuation is dealt with on separation has changed in recent years. Because this is an area that has moved, and because the detail turns on your specific circumstances, you should confirm the current position with a specialist family lawyer before relying on it. This is one topic where general information online can easily be out of date.
Valuing superannuation
Super is not always straightforward to value. Accumulation accounts, defined benefit interests and self-managed funds are each assessed differently, and the figure on a member statement is not always the value used in a settlement. Self-managed funds, which many business owners hold, add complexity, particularly where the fund owns commercial property, business premises or other assets that themselves need to be valued by an expert.
Self-managed funds and business owners
Where a self-managed fund holds business premises or is closely tied to the business, splitting super can have flow-on effects for the business itself, including tax and liquidity. Getting the valuation and the structure right matters, so a split does not force the sale of an asset the business depends on. This is where coordinated legal, accounting and financial advice earns its keep, and where a rushed agreement can be costly.
Time limits and advice
De facto partners generally have two years from separation to bring a claim, so early advice matters. A specialist can explain how superannuation fits into your overall settlement, what evidence is needed to value it, and how to coordinate with your accountant and financial adviser where a self-managed fund is involved, so nothing is missed.
Coordinating the advice
Because a superannuation split can affect tax, contributions caps and the running of a self-managed fund, it should not be dealt with in isolation. The most efficient path is usually to coordinate your family lawyer, accountant and financial adviser from the outset, so the split is structured in a way that works across the whole picture rather than solving one problem and creating another. A change to super also shifts the balance of the rest of the settlement, since less super for one partner may mean a larger share of other assets, and the two need to be weighed together. Where a valuation is contested, an independent expert may be needed, and building that time into the process avoids a last-minute scramble.
As the largest team of specialist family lawyers in WA, Leach Legal advises business owners on complex financial separations, including superannuation and self-managed funds. Book a consultation to understand where you stand.
