The legal framework
Property division under the Family Law Act follows a structured discretion: identify the asset pool, assess contributions, consider future needs, and check that the outcome is just and equitable. There is no inheritance tax, but superannuation death benefits are taxed differently depending on the recipient, and family provision claims are frequent.
Key points
| Asset pool | Includes superannuation and, in practice, assets held in trusts and companies |
|---|---|
| Contributions | Financial and non-financial, including homemaking and parenting |
| Future needs | Age, health, earning capacity and care of children |
| Binding financial agreements | The Australian prenuptial equivalent; strict formalities |
| Testamentary freedom | Broad, but eligible persons can claim family provision from an estate |
| Superannuation | Passes outside the estate unless directed to it; binding death benefit nominations matter |
| Inheritance tax | None, though capital gains tax can arise on later disposal |
| Four-step process | Identify the pool, assess contributions, assess future needs, check overall justice |
| Superannuation splitting | Requires a formal order or agreement; the fund must be given notice |
| Family provision | Eligible people can challenge a will in every state |
In practice
- Make a binding death benefit nomination for superannuation — the largest asset many people have.
- Consider testamentary trusts where children or asset protection are in issue.
- Formalise property settlements by consent order rather than informal agreement.
- Expect family provision exposure if you exclude a child or a de facto partner.
- Give the superannuation fund procedural fairness notice before seeking a splitting order.
- Review binding financial agreements after major life events; courts set aside defective ones.
Cost and coverage
Wills and nominations are inexpensive; contested estate litigation is not, and costs often come out of the estate.
Recent changes
Family provision claims are so common in some states that they are treated as a routine planning consideration rather than an exception.
Where to go
- State supreme court probate registries.
- Public trustee offices, which provide low-cost wills in several states.
- Law society referral services.
Worth knowing
Superannuation does not automatically follow your will. Without a binding nomination, the trustee decides who receives it — a frequent cause of disputes between a new partner and adult children. There is no inheritance tax, but superannuation paid to a non-dependent adult child is taxed. Consider who is nominated and why.
Official sources and links
- Federal Register of Legislation — Commonwealth law as made and in force
- Services Australia — government services and payments