Divorce is super opportunity
Divorce will be the next big areas to impact on superannuation, according to Australian Super Nominees managing director Ben Smythe.
Smythe says the reason for the renewed focus of the effects of divorce on super is due to legislation, titled Family Law Legislation Amendment Bill, currently in Parliament.
This legislation is designed to even up the split of assets during a divorce, including super and avoid one party being disadvantaged as a result.
"At present a split is usually along the lines of property and superannuation with one party receiving a liquid asset and the other an illiquid asset," Smythe says.
"The main thrust of the bill is to allow splitting of superannuation in divorce either via agreement or court order."
Smythe says once the legislation is active it would be a growth area for advisers who could make use of self managed superannuation funds (SMSF) or small APRA funds (SAF).
A SAF is a fund held by four members or less and has an approved third party trustee while a SMSF also has four members or less but all members act as trustees of the fund.
He says SAFs would be a better choice of fund in a divorce as all the parties will not hold a position as trustees of the fund.
Ideally this should not be the planner according to Smythe, who says the planner can then avoid any conflicts and the pain of getting involved in the split while continuing to provide advice.
Smythe says the bill was unlikely to be passed this tax year with only four sitting days remaining but would probably be passed before the upcoming election with an 18 month delay before it become effective in 2003.
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