‘Creative’ super splitting strategy knocked back by court
A first attempt at a “creative” splitting order put forward by a man indebted to his former mother-in-law has been knocked back by the Family Court.
Speaking to SMSF Adviser, Townsends Business & Corporate Lawyers special counsel for superannuation Michael Hallinan said the court held that the splitting provisions of the Family Law Act only permitted the splitting of super interests between couples – whether married or de facto.
In this particular case, Mr Hallinan said, the husband was indebted to his former mother-in-law and the husband and wife agreed that his super interest could be split in favour of the mother-in-law as partial payment of that debt.
“It’s outside the powers conferred by the Family Law Act to split benefits,” he said.
This decision by the Family Court will prevent people from trying to split benefits with other third parties, such as children, Mr Hallinan said.
“People may want to, say, split super, not with a spouse, but with the children of a marriage – that’s obviously not possible because it’s restricted to just the parties of the marriage,” he said.
“Full marks for lateral thinking but not successful this time."
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.