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Estate Planning and Superannuation

ESTATE PLANNING and SUPERANNUATION – The importance of considering Superannuation as part of your overall Estate Planning

Estate Planning Decision: In D17-18/120 (2018) SCTA 24 the Superannuation Complaints Tribunal (“Tribunal”) had to consider an application by the Deceased three minor children for payment of the death benefit and whether the binding death benefit could be overruled.

Facts

  • The Deceased had two adult children with his first wife and three minor children with his second wife.
  • After being diagnosed with a terminal illness the Deceased signed a new Will and at the direction of his solicitor, a Binding Death Benefit Nomination (“BDBN”) ( six months prior to his death.)
  • Both the Will and BNBN were in favour of his two adult children in equal parts.
  • The evidence supplied was that the Deceased had not been in contact with his second wife for many years; however had a strong and close relationship with his adult children.
  • The second wife sought that the death benefit be split equally among all children.  This application was rejected by the Trustee.
  • Continue reading…

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Benefits of Consulting with a Marriage Lawyer

When a marriage or de facto relationship breaks down, it can be a stressful time. Part of this process may involve the separation of assets, which may include the family home, business interests, investments, savings and superannuation.   If a mutual agreement cannot be reached, the Court can determine the settlement. Obtaining the right financial and legal advice from a marriage lawyer at the early stages of this process can help a party to navigate their way through the Family Law system and make decisions about their assets and superannuation that provides a better outcome.

Superannuation Splitting as part of a property settlement

Superannuation is an asset that can usually be divided as part of a property settlement. Sometimes it is not possible to split superannuation.  For example:

  1. When the interest is of little or no value, when it would not be cost effective to do so (see The Commonwealth Attorney-General’s guide “Splitting Laws – Frequently Asked Questions”);
  2. Continue reading…

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Why you should check with a separation lawyer about enforcing a property order against you ex’s superannuation

You may settle your property arrangement with your former partner by agreement, with assistance of a separation lawyer or by judgment of the Court. This may include for property to be transferred to one of you, or for a cash payment made in exchange for an interest in property.

But what happens if you have these orders, but for one reason or another, your former partner has not completed their end of the bargain? What if your former partner is to pay you a certain sum of money by a certain time, but the time comes and goes, with no payment from them? What if, after seeking legal advice from a separation lawyer and looking to enforce the orders, you find they have no means of payment? If they have no substantial assets, can you make an application to the Court and seek the monies they have agreed to give you are taken from their superannuation?

Continue reading…

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Superannuation and Family Law Lawyers

For most working Australians, superannuation is the largest asset they will have outside of owning their home.  The amount of superannuation that an individual has will largely depend on their employment history and earnings.

How does this relate to divorce and separation?

A recent research report by David Hetherington and Warwick Smith from ‘Per Capita’ has noted how women’s superannuation generally accrues at a lower rate than men’s. See Figure 1 below which highlights data from the Australian Bureau of Statistics.

graph

The report notes that superannuation benefits accrue in direct proportion to income received. It is often the case that women spend less time in the workforce and so do not have the same opportunity as men to contribute towards their superannuation. Reduced time within the workforce is attributable to various factors including taking time off work to care for young children, carer responsibilities such as taking children to and from school and caring for children when they are sick.  Other relevant factors include the cost and availability of childcare. All of these contributing factors often lead to an increased likelihood of being engaged in part-time or casual employment.  Clearly these factors would also apply to fathers who carry out a primary care role.

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Divorce Lawyer advice on the Impact of Divorce on Retirement

Often during a highly stressful divorce or property settlement, for instance where domestic violence may be involved or the parties are simply eager to settle quickly and move on with their lives; individuals are readily settling without consideration of future financial stability.

In particular, an article by Patricia Babalis highlighted a report by the Swinburne Institute for Social Research which discovered that at divorce, asset settlement ‘is often mishandled due to emotional tension and ignorance of what can be included in a settlement’.

Further, the article touched on the reality that is financial instability from divorce. Where separating parties do not achieve a settlement that ensures future stability, individuals may find themselves struggling in their retirement plans due to reduced super balances and sale of property.

In reiterating the words of Babalis, divorce is a stressful and sometimes unexpected time. However, ‘knowing what you may be entitled to could be a good start to making sure asset distribution is fair.’ A divorce lawyer  from  our  team is able to give you the guidance you need in regards to your current situation, as well as ensuring the best for your future long term financial position.

Continue reading…

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Is your Self Managed Superannuation Fund compliant?

Our commercial law team at Matthews Folbigg strive to keep you up to date with the latest information and legal advice on self managed superannuation funds.

The Superannuation Industry (Supervision) Act 1993 (Cth) sets out a number of particular requirements which a self managed superannuation fund must meet in order to remain legally compliant.

As seen in the recent case of Coshott v Prentice [2014] FCAFC 88 it is extremely important that you seek legal advice not only upon the establishment of a self managed superannuation fund but also during the life of the fund, particularly when purchasing property.

If you would like a commercial lawyer to review your self managed superannuation fund or would like more information on this area of law please contact us.

Phillip Brophy – phillipb@matthewsfolbigg.com.au or 9635 7966

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Recent Federal Court decision spells disaster for bankrupt and his non-compliant self managed superannuation fund

The recent case of Coshott v Prentice [2014] FCAFC 88 highlights the importance of seeking legal advice to ensure that your self managed superannuation fund (SMSF) is compliant under the Superannuation Industry (Supervision) Act 1993 (Cth).

In this case, the Full Federal Court found that although a property was claimed to be held by a SMSF it was in fact beneficially owned by the bankrupt. Consequently, the property would be dealt with as being part of the bankrupt estate.

If you wish to ensure the protection of assets held in a SMSF the fund must operate as a compliant fund.  Contact Matthews Folbigg today to speak with a commercial lawyer about asset protection or to check the compliance of your SMSF.

Phillip Brophy – phillipb@matthewsfolbigg.com.au or 9635 7966