Divorce & Separation – Dealing With Assets
The article recently published by Suncorp titled “Untying the Knot” provided insight into the following insight into Australian divorce:
– An average of 50,000 divorces are processed each year in Australia
– At the time of divorce, the average age is 42 for women and 45 for men
– 50% of all divorces involve children – the most common divorce involves two children
– Divorce proceedings most commonly begin in January
– Per capita, Queensland has the highest divorce rate in Australia and the Northern Territory has the lowest
– On average, a marriage will last 9 years before divorce
– Processing a separation to a divorce takes an average of three and a half years
– At 4.7 divorces per 1,000 people, Russia has the highest divorce rate
– Australia’s divorce rate is 2.2 per 1,000 people, higher than China, France, New Zealand and the United Kingdom
– A straightforward is likely to incur a cost of $3,600 per couple while a contested divorce will cost close to $10,000 – in addition to likely relocation, child care, loss of work and other expenses
– At the average divorce ages for men (45) and women (42), the average male superannuation balance is $128,000 while for women it is $42,000
– Married couples on average retire between the ages of 65 and 69 while divorcees aren’t likely to retire until they are at least 75 – adding up to ten years to their retirement age
From a legal perspective, the division of assets during a divorce is referred to as a Property Settlement – typically including the family home, investment properties, investments, savings and sometimes a business ownership.
Divorce & Superannuation
Another asset that can be legally included in a property settlement is superannuation. This can be transferred between spouses in the event of a divorce filing or relationship breakdown – including de-facto relationships, same sex relationships and relationships registered under state or territory law.
When considering superannuation, it is important to consider the following:
– If transferred as part of a property settlement, superannuation interest must be compiled proportionally and maintain the same preservation status when transferred to a former spouse
– Superannuation interest can be split by either a superannuation agreement or via a court order
– A superannuation agreement gives couples the option of splitting property without going to court as part of a binding financial agreement which can be made at any time before, during or after the end of a relationship
– In order for a financial agreement to be binding both parties involved must receive independent legal advice prior to signing and retain a personal copy of the agreement afterwards – except in rare circumstances this cannot be overturned by a court
– If unable to reach an amicable agreement then will have to seek a court order from the Family Court in order to split their assets
– An application can be filed to the court to issue a consent order if a couple are in agreement, however, do not binding financial agreement
– If an agreement cannot be reached the court will issue a financial order outlining the division of assets
Regardless of whether a couple goes to court or not, it is important in all situations to seek legal advice as various parts of asset and superannuation division require both parties to declare that they have received independent legal advice prior to settlement.
In addition to dealing with the split of assets, there are many other financial matters that may require attention in the event of a divorce or relationship breakdown. These include the need to restructure savings and investments, set a new budget, set new goals and retirement plans, review superannuation fund beneficiary nominations and revisit wills and estate planning arrangements.
Other beneficial outlets that can be helpful when splitting assets in the wake of a relationship are financial planning advice, legal advice, counselling and advice from Centrelink’s Financial Information Service (FIS). These channels can help to clearly define your options and to aid with the administration involved in the process.
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