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SMSF Separation and Divorce

SMSF, Separation and Divorce – A Guide to managing your Super

In today’s world, the unfortunate reality is that a significant number of marriages end in divorce. According to the ABS, 42.7%* of marriages ultimately dissolve, and many SMSFs face this issue. As a result, it’s essential to know how to manage your SMSF during separation or divorce.

Here are some steps to help you navigate your SMSF separation or divorce:

  1. Leave the SMSF assets untouched until a later date or a trigger event.
  2. Split your SMSF assets.


Splitting SMSF assets is the most common step couples take. Super assets in a union are divisible by a court order or by agreement (refer to the Family Law Act 1975 and the SIS Act 1993).

Aim for an agreement with your spouse to divide your super equally or provide additional funds based on mutual understanding. You can then decide who maintains the SMSF and who rolls out their super to a retail fund or establishes another SMSF. Typically, the male partner maintains the SMSF, as it’s usually their family name used as the fund’s legal name.

If the separation is not amicable, each partner typically engages a lawyer. Here are some steps to take when splitting your super:


  1. Contact your SMSF Administrator or accountant and request the fund’s last tax return and member statements. Often, the value of the fund’s assets is reflected in the latest completed tax return. Member statements will highlight each member’s contributions, while the financial statement identifies the fund’s total assets and liabilities.
  2. If you hold property with a loan, ensure you can fund the loan on one super contribution and the property’s rental income, allowing a lender to refinance the loan. Alternatively, consider selling the property.
  3. Obtain up-to-date valuations on properties and listed investments, such as online property valuations or portfolio/investment reports for shares and ETFs.
  4. Try to agree on a split of assets or apply for a court order. Document your split of assets and get independent legal sign-off. Inform the super fund administrator or accountant of the court’s decision.
  5. Decide who will maintain the fund and who will roll out.


A good first step is approaching your SMSF provider or administrator, who likely has experience with SMSF splits and can offer general information. Seek financial advice on separation strategies and legal advice when all else fails to obtain a settlement on your super assets. It’s best to approach lawyers as a last resort, as costs can be extremely high when engaging lawyers for SMSF splits.

Remember that SMSF and super assets can be passed on as an inheritance to existing members or next of kin, without involving other assets and your estate. Super cannot be accessed or moved overseas until a condition of release is met, making option (1) potentially the best outcome for couples in this situation.

This article primarily concerns SMSF assets, but it’s essential to acknowledge that separation or divorce may also involve other assets, such as a family home, investments, and personal belongings. For couples with significant assets in multiple structures, sound legal advice is often the best option. For most Australians who own a home and have assets in super, these guidelines can save time, money, and heartache.

Warning: This is general information only. Seek appropriate legal advice before proceeding further.

ABS*[email protected]/mf/3310.0