Can you afford to get divorced?

by Peter Magee on September 20, 2011

Peter MageeMany spouses believe that they can’t afford to leave an unhappy marriage. In Canberra, the divorce capital of Australia, some are finding that certain government superannuation schemes make separation a more practical proposition.

An article in Sunday’s Canberra times (14.08.2011) found that Canberra has the highest divorce rate in Australia (almost double the national average). This may have several causes:

  • Canberra families may be a more  transient community, with one spouse being sent to work in Canberra, while the family remains at home in another city;
  • Canberrans enjoy a high standard of living, often with two incomes, which may make it easier to leave a marriage.
  • There may be diplomats or foreign nationals living in Canberra whose spouses wish to return to their home country, leaving the other spouse in Canberra.

So what does this mean for the average Canberran facing or contemplating a higher than average rate of separation?

Make a binding financial agreement

Firstly, you can enter into a legally binding arrangement with your spouse or de facto partner about dividing your assets and financial resources even before you enter into the relationship, get married or decide to separate. This can be done under the Family Law Act provisions dealing with Binding Financial Agreements. Provided that both partners have independent legal advice, such agreements cannot be set aside by the courts (other than in the rare cases, such as where there has been duress, or fraud). Having such an agreement gives both parties certainty about how their assets will be divided if and when they separate.

Treat them like an insurance policy, if you like. We all hope our houses don’t burn to the ground but it gives peace of mind knowing that we are covered if that event happened.

If you have not entered into a binding financial agreement and you wish to leave a marriage but do not know if you can afford to do so, you may be able to find out about your spouse’s superannuation entitlements quite discreetly, before raising the issue of separation with your spouse.

Find out how much super your spouse has

Many Canberrans work for the Federal Government, either as public servants, as members of the Military or Australian Federal Police (AFP). Such employees may have superannuation interests in Military Super, ComSuper, PSS, CSS and other equally generous older style superannuation schemes. The value of such schemes for ‘family law purposes’ can be much higher than it appears on a member statement. This is because the method of valuation by an expert will take into account the length of the service, age of member, years to retirement and other factors.

A recent case I had involved a CSS member close to retirement whose normal member statement showed superannuation assets of $272,000 but a superannuation value for family law purposes found the real value to be over $800,000. The wife in that case was able to obtain a splitting order which gave her $400,000 she was otherwise going to miss out on.

How do you find this information out? We can assist you filling in the appropriate forms to find out the information about a spouse’s superannuation from the super fund. That information is sent directly to you or to our firm without the member knowing. We can then arrange to have this information formally valued by a superannuation expert without the member knowing.

The fees can include disbursements of around $150 for getting the information from the fund and another $400 or so to have that information valued.

If the difference in the asset pool is an extra $600,000 available for division between both parties, then paying modest legal fees to find out this information can seem like a very worthwhile exercise. Once you have that information, you could then obtain some financial planning advice and legal advice which may assist you in making a decision whether to leave the relationship.

If Armstrong Legal can assist you further in learning about superannuation and binding financial agreements, please contact Cristina Huesch on 6288 1100.

Leave a Comment

Previous post:

Next post: