Soon the most asked question at dinner parties will be "should we delay the divorce until the new super splitting laws come into force?"
Many Australians don't know that new laws to allow for the splitting of superannuation on marriage breakdown will commence on 28 December 2002.
This awareness level is odd given that the issue has been on the agenda for quite a while and the changes will have far-reaching impact on many of us. So much so, we could see many divorces deferred until after the new laws are introduced.
But are our financial planners, family law advisers and lawyers prepared? Not according to recent research from Australia's major business publisher - CCH.
Nathan Moyes, Publisher for CCH, commented that "even with widespread media coverage of this major topic in 2002, we believe that very few lawyers, superannuation fund trustees and financial planners are ready to answer their clients' questions on the new laws.
"The end-of-year changes will radically alter the asset split following divorce by including the superannuation of both parties in the settlement", he said.
"Familiarity with the new scheme is critical for anyone giving advice on superannuation and family law. Couples looking down the barrel of a divorce need to understand the implications of the changes to take full advantage of the tax arrangements under the new super splitting laws."
The super splitting laws create new options for separating and divorcing parties by treating superannuation as property, in the same way that other assets (house, shares, etc) are covered. The rules will allow for the division of superannuation either by court (property) order or by agreement between the two parties.
The courts that operate in this area of the law (typically the Family Court or the new Federal Magistrates Court) will be given new powers to decide on the split.
And it seems likely that some de facto relationships won't escape the changes. Some States have recently agreed to refer power to the Commonwealth in relation to de facto relationships. However, legislation at both State and Commonwealth level is necessary for this to be put into effect. Once legislation is passed it is anticipated that the superannuation of de facto couples, in those States that agree to refer power, will be included in the new regime. However, in those States that do not refer power, the superannuation of de facto couples will not be included in the new regime. The Commonwealth has indicated that it will not legislate to include same sex couples in the regime.
These changes will also impact greatly on the administration of superannuation funds so fund managers need to quickly come up to speed. Superannuation trustees, administrators and advisers need to know how to respond to the new requirements.
Lawyers and other advisers can't help their clients fully without knowing how their assets will be affected by the new provisions to split superannuation on marriage breakdown.
In turn, family lawyers will need to learn unfamiliar terms used in the superannuation industry, while superannuation trustees and lawyers will need to become familiar with how family law works.
Failure to understand the changes in legislation impact directly on being able to handle benefits entitlements as part of settling divorce arrangements.
Mr Moyes added, "We've seen a real upswing in interest in this area over the last month or so - many of our legal clients have been actively seeking information on the new rules and their impact." In response to this, CCH has had to reprint its recently launched book on the topic - Super Splitting on Marriage Breakdown.
Mr Moyes went on to mention "demand for this information is rapidly growing as the realisation and the countdown to the changes set in.
"We created this much-needed book to help our customers come to grips with the full range of issues quickly and easily ahead of the rush in 2003".
CCH Australia is a leading provider of smart information tools for business professionals, serving the legal, tax, business and education markets. CCH Australia is part of the Wolters Kluwer group of companies, one of the world¿s largest business publishing alliances. For more information please visit www.cch.com.au or call 1300 300 224.
About the book
Super Splitting on Marriage Breakdown has been designed to help lawyers and others prepare in the lead up to the December 2002 commencement of new superannuation laws. The book helps advisers to offer their clients the most informed professional advice.
It provides a comprehensive analysis of how the new laws will operate, including:
- how superannuation will be valued;
- how arrangements can be structured to give the separating couple a financial advantage;
- implications for trustees and administrators;
- a discussion on financial planning issues;
- full text of the new legislation.
Written by well-respected family lawyers - Garry Watts, Stephen Bourke and Michael Taussig QC - this practical book provides step-by-step checklists, handy tips, worked examples, leading cases and general principles, all in an easy-to-use, ready reference.
For further information please contact :
Margaret Burke (product and author related information)
Product Development Executive
CCH Australia Limited
Tel 9857 1442
Elisa Tseng (marketing information)
CCH Australia Limited
Tel 9857 1551