Family Law 際際滷show
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Brett Hartley discusses the financial consequences of marital separation and introduces the new super splitting laws in Australia. The document outlines key facts about separation, divorce, property settlement, spousal and child maintenance, binding financial agreements, and the treatment of superannuation as property. The new super splitting laws that took effect in 2002 allow superannuation interests to be split between spouses, which has far-reaching impacts given most marriages end in divorce and super represents a large portion of peoples' wealth.
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Family Law 際際滷show
- 1. Brett Hartley Accredited Family Law Specialist & Principal Hartley Family Law Services Financial Consequences of Marital Separation & an Introduction to the New Super Splitting Laws
- 2. Important Facts About Separation Divorce obtained 12 months after separation Property Settlement 1 year after divorce File for property settlement upon separation Spousal & Child Maintenance Resolve property settlement properly Capital Gains Tax and Stamp Duty Exemptions Prepare a new Will Examine your Superannuation Policies
- 3. Spousal Maintenance No automatic right What the Family Law Act provides Factors the Court looks at Reasonably able to do so Lump sum or periodic maintenance Urgent and interim orders
- 4. Property Settlement Either party may make application No compulsion Extremely important to resolve after separation 12 month time limit after divorce The notion of fault is irrelevant
- 5. How Property Settlement is Determined by the Court The Family Court has a wide discretion There are three steps: Determine the net value of all property ascertain & value property Contributions financial, non-financial, welfare of family Examining Other Circumstances age, health, income, children, duration
- 6. How Property Settlement is Determined by the Court Finalising the Financial Agreement By Consent Orders or Binding Financial Agreements Binding Financial Agreements Overview of Legislation Entered into: before marriage, during the marriage or after the dissolution of the marriage
- 7. Binding Financial Agreements Why should your clients enter into such Agreements Provide certainty Protect ownership of assets brought in Protect ownership of inheritances Protect ownership of business interest Prevent costly, lengthy litigation Peace of mind & binding on the estate
- 8. Binding Financial Agreements Who needs an agreement most People entering into second marriage, to provide for pre-existing children People entering into second or subsequent relationships/ marriage Couples employing asset protection People with substantial assets Stamp Duty and Capital Gains Tax relief
- 9. Super Splitting Treatment of Superannuation as Property New laws encapsulated in: Amendments to the Family Law Act The Family Law Superannuation Regs Amendments to the SIS Regs Operational from 28 December 2002 Radically alter the way super is treated upon the breakdown of a marital relationship Define superannuation as property
- 10. Super Splitting Treatment of Superannuation as Property New laws allow super interests to be split Far reaching impact: Approx 43% of all marriages end in divorce Most separate between 10-30 years Average age people marrying increasing The vast majority have superannuation Super represents 20-60% of total wealth 24Mil a/c, av bal $54,000, double by 2020
- 11. Super Splitting Treatment of Superannuation as Property What to do before 28 December 2002 Enter into Orders and leave super Delay property settlement until after 28/12 Interim property orders Splitting & Flagging Orders New laws apply to most fund, including: Defined Benefit Funds & Accumulation Funds
- 12. Super Splitting Treatment of Superannuation as Property Super Splitting Orders Depends on type of fund and type of benefit Defined benefit or accumulation Growth phase or payment phase Payment splitting regime Base Amount Create a new superannuation interest with or without a super splitting order
- 13. Super Splitting Treatment of Superannuation as Property Defined Benefit Scheme Cant create new interest for non-member Cant roll out interest for non-member Base amount gives rise to creation of a new account within the members account, preserved & grows at an inflation factor Non-member spouse paid first when member spouse entitled to payment Piggy Back Order
- 14. Super Splitting Treatment of Superannuation as Property Defined Benefit Scheme Non-member has no control over when payment received solely dependant upon the member deciding to retire Flagging orders will be used when it is likely that the member will soon satisfy a condition of release e.g. retire or redundancy Placed on the Trustee preventing payment to member until flag is lifted
- 15. Super Splitting - Superannuation Agreements Binding financial agreement can contain an agreement concerning superannuation interests Referred to as Superannuation Agreements Valuation Requirements If there is a dispute between the parties, Family Court must value the super interest according to the Family Law Regulations If parties reach agreement not bound by Valuation methods
- 16. Super Splitting - Valuation Requirements Accumulation Funds relatively easy to value Contributions & interest less admin charges Difficulty in valuing at any given point in time Use linear interpolation techniques Deduct amounts payable under an earlier payment spit from a previous marriage Deduct surcharge debt
- 17. Super Splitting - Valuation Requirements Defined Benefit Fund is a lot more complex Specific regulations in Family Law Regs Involves complex actuarial calculations
- 18. Super Splitting - Obligations Upon Trustees SIS regulations impose new obligations Payment Splitting Regime Orders Non-member spouse requesting information from a Trustee Provision of information is mandatory by Trustee Trustee has obligations upon receipt of the Super Splitting Orders Follow two separate paths re base amount
- 19. Super Splitting Effect of Death Important to consider the effect of death when looking at Super Splitting Orders & Agreements Death of non-member spouse Accumulation Funds Defined Benefit Scheme Death of a member spouse Accumulation Funds Defined Benefit Scheme Exception relates to payment re children
- 20. Super Splitting Specific Financial Planning Issues New ETP for non-member spouse Essentially, Super Splitting creates two ETPs Both member & non-member spouse will have separate RBLs Depends on whether the interest is split under the regs or a Payment Splitting Order Different considerations for pension payments ESP set to zero for non-member
- 21. Brett Hartley Accredited Family Law Specialist & Principal Hartley Family Law Services A Legal Firm Practicing Exclusively in Family Law & Defacto Law Level 15, Brisbane Club Tower, 241 Adelaide St, Brisbane 4000 Ph: 07 3220 1299, Fax: 07 3220 1277, Mobile: 0417 569 299 email: brett@hartleyfamilylaw.com.au home page: www.hartleyfamilylaw.com.au Financial Consequences of Marital Separation & an Introduction to the New Super Splitting Laws