Separating but staying together – what to consider if you remain in the same SMSF

In recent years I have noticed a growing trend in couples wishing to remain in the same self-managed superannuation fund (“SMSF”) as part of their family law settlement.  At first glance, it makes little sense but in order to determine whether it may be right for you, it is helpful to consider what might be fuelling the appeal.

Resoundingly the main reason for a party wishing to stay in the same SMSF as their soon to be ex-spouse after separation boils down to one simple fact – a winning return on investment.  The more money you have to invest, the greater your buying power both to attract the best rate of return on your investment and to negotiate the lowest management fees ultimately resulting in a superior yield.


Anecdotally other factors repeatedly feature in this growing desire:

  1. In the case of a “sleeper” spouse, a complete faith in the ex-stemming predominantly from the financial performances of the SMSF over recent years or, in the case of the more active member spouse, a continuing willingness to continue in this role. Surprisingly, the breakdown of a personal relationship does not automatically sever the specialisation of labour roles that can ordinarily become entrenched in long term relationships;
  2. A lack of a viable alternative. Being part of a SMSF is sometimes worn as a badge of honour.  A spouse may not want to surrender that title and move to a retail or industry based superannuation fund with management fees linked to the superannuation amount nor may they want to be solely responsible for managing their own independent and newly established SMSF but staying in the same fund and sharing the management fee not linked to the superannuation amount.  A new SMSF may not make emotional or financial sense; and
  3. A level of complexity involving the underlying assets. A SMSF that is heavily invested in say commercial premises from which one of the spouses operates their business may prove more difficult to unravel.


Are these reasons sufficient in the context of a separation?  Let’s look more closely at each one.

Undeniably the larger the investment (which staying in one SMSF can ensure) the greater the likely return.  However consider what even superior returns may be achievable joining in with one of the larger retail funds.  In the past decade, many of those funds have experienced returns into the double digits and on closer inspection may give your SMSF (no matter how so configured) a run for its money.  However, retail and industry funds have management fees linked to the superannuation amount whereas SMSF has a fixed rate, not linked to the superannuation amount.

A ”sleeper spouse” who judges his or her ex’s performance to manage the SMSF over the past 10 or 20 years and attributes all of its success to that person’s financial acumen would be naïve given the financial landscape which we have recently enjoyed and the historical upward trend in our wealth overall.  The true test of a funds ability to perform is possibly better judged in times of uncertainty and downturn.  Be cautious in blindly believing that the golden goose will continue to lay golden eggs.  The flip side of this for the more active soon to be ex-spouse / trustee of the SMSF is the need to consider how viable it is to “carry the load” into the future.  How will this dynamic or imbalance play out in the case of repartnering?  The primary purpose of superannuation is to provide for you financially in retirement.  This is a long term objective.  It is important to recognise that it is therefore deserving of long term planning.

Importantly there is no special honour in being a member in (and trustee of) a SMSF.  Those that properly understand the responsibilities that come with discharging trustee duties are often more open minded about alternatives.  Talk to your lawyer, accountant and financial adviser who may be able to assist you consider all the pros and cons of viable (and often less onerous) alternatives.


If after reading this you feel comfortable continuing in the same SMSF with your soon to be ex, then the following are important take home points for separating couples:


  1. Make an appointment with your lawyer or accountant to discuss and take steps to rectify any non-compliance issues;
  2. Ensure your annual audit is up to date and you have up to date valuations for any underlying asset held by the self-managed super fund as the ATO now relies on market value on an annual basis;
  3. Organise specialist superannuation advice in relation to the operative Trust Deed. Inform yourself properly on how the fund operates and what obligations fall on you.  Also, consider what is likely to occur in the case of a deadlock in the future management of the fund;
  4. Determine whether the Trust Deed is current or needs updating. Some excellent service providers offer a routine review of the Trust Deed at an ongoing modest cost;
  5. Think about and seek advice in relation to the investment strategy of the fund that best suits your now likely differing goals and insodoing reflect on your risk tolerance and investment objectives. Are you wanting the fund to invest in conservation or growth assets for example?
  6. Lastly, please ensure you are completely cognisant of an exit strategy. What are the prerequisites? How can it be executed?  What are the costs and who do you need around you to ensure its success?  How liquid are the investments?


Beyond all of this, if you have been the “sleeper’s spouse” in this relationship, it is now time to wake up and rise to the occasion and in the case where you have been the one in the driver’s seat, you may have to adjust to sharing that space.  In the context of separation, these consequences can be overlooked and need careful consideration for each member spouse of a SMSF.



About the Author

Lisa Wagner is Principal and Managing Director of Doolan Wagner Family Lawyers. Lisa is an Accredited Family Law specialist and a nationally registered Family Dispute Resolution Practitioner. Lisa has close to 30 years’ experience as a specialist family lawyer, experienced litigator and skilful negotiator in all family law matters.

Connect with Lisa on LinkedIn:




These articles are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us on (02) 9437 0010.

What are the legal implications of parental alienation?

Parental alienation is a term which is used to describe when one parent (the “alienating” parent) behaves in a certain way to undermine and damage the other parent’s relationship with a child.

Whilst this term is considered to be controversial and there is a reluctance by the Court to label certain behaviour as this, it is apparent that behaviour which falls under this definition is becoming more and more common, particularly when there are parenting proceedings on foot. The uncertainty arising from COVID-19, is likely to see an increase of these cluster of behaviours.

Case Law

In determining what is in the best interests of the child, the Court must consider primary considerations as set out in Section 60CC of the Family Law Act 1975, being:

  1. The benefit of the child having a meaningful relationship with both of the child’s parents; and
  2. The need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.

Although there is reticence for the Family and Federal Circuit Court to identify and label a parent’s behaviour as “parental alienation”, there have been numerous cases where the Court has recognised such behaviour and accordingly made orders to change primary residence in circumstances where one parent poses an unacceptable risk of harm.

In Lankester v Cribb [2018] FamCACF 60 (6 April 2018), the Mother was the primary carer of a nine-year-old child and it was alleged by the Mother that the Father of the child had sexually abused her.

During the course of the proceedings, evidence was produced demonstrating that the Mother had been frequently questioning the child about sexual abuse including, on one occasion, having recorded the conversation and the child’s complaints. Whilst there had been medical examinations of the child and an assessment undertaken by the Department which concluded there was no evidence of sexual abuse, it was the Mother’s view that the Father had sexually abused the child.

Also read: Q& A | Separation, Child Custody and Parenting

After the Family Consultant met with the parents and child, it was expressed by the Consultant that in their opinion as a result of the Mother’s behaviour namely the unfounded allegations, the child would be “exposed to continuing distress and confusion about her relationship with [the Father] whilst she lives with [the Mother]”. Further, that as a result of the Mother’s behaviour, each changeover would be a “highly stressful experience” for the child which would likely affect the child’s emotional and social development, in turn impacting upon the child’s capacity to connect positively with her Father.

Although the Court recognised that changing a child’s primary residence may result in grief, loss, confusion and a high level of stress, these adverse consequences were considered to be outweighed by the risk the Mother posed to the child should the child continue to live with her. On the basis that the Mother posed an unacceptable risk of harm to the child while in her care, the Court ordered that the child’s time with the Mother be suspended for a period of six months, after which time there be a staged reintroduction of time (including planned supervised and unsupervised time) with the Mother.

Similarly, in Goldman v Goldman [2018] FamCACF 65 (12 April 2018), the Court changed the primary residence of the two children (aged 11 and 13) as a result of the Mother’s behaviour. This was largely based on the Single Expert’s opinion that the children had a “close dependent relationship” with the Mother which was “not conducive to good future mental health”.  The Court also formed the view that the Mother was entirely focused on punishing the Father by “… turning the children’s affections away from him” which in turn caused emotional harm to the children and posed a continuing unacceptable risk of harm to them.

The consequences of parental alienation

As a consequence of the Mother’s behaviour, a change of residence was ordered which resulted in the children living with the Father. The Court also ordered that the children’s time with the Mother be suspended for a period of four weeks, after which the children spent supervised time with the Mother for one year, and thereafter in accordance with a gradual and incremental increase of unsupervised time.

It is not often seen that the Court orders a change of residence for children from one parent to another. Where it is established, however, that one parent’s behaviour has (and will continue to) harmfully impact a child and/or their relationship with the other parent, the Court will consider such an outcome. This is the case even if such behaviour is not labelled as “parental alienation”.

Doolan Wagner Family Lawyers offer specialist family law advice and are based in St Leonards on Sydney’s North Shore.  If you have recently separated or have a Family Law enquiry, please contact us on (02) 9437 0010 or send us an email at to discuss your matter in complete confidence.  We have a dedicated team of experienced family lawyers to handle your matter effectively and efficiently, providing you with reliable, direct and practical advice.

About the Authors:

Lisa Wagner is Managing Director and Principal of Doolan Wagner Family Lawyers. Lisa is an Accredited Family Law specialist and a nationally registered Family Dispute Resolution Practitioner. Lisa has close to 30 years’ experience as a specialist family lawyer, experienced litigator and skilful negotiator in all family law matters.

Connect with Lisa on LinkedIn:

Ashleigh Middlin is an Associate at Doolan Wagner Family Lawyers. Ashleigh’ s background in child protection and matters of domestic and family violence has created in her a highly empathetic approach towards her clients. She is focused on assisting clients to finalise their matter as efficiently and cost-effective as possible. Ashleigh’s areas of expertise include property settlements, including negotiated agreements, lawyer-assisted mediations, parenting matters relating to the care of children including negotiated agreements and litigation and child support and spousal maintenance matters.

Connect with Ashley on LinkedIn:


These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.