Last updated on June 9, 2026
Can I keep the SMSF after the divorce?
Absolutely, you can keep the SMSF after a divorce. Generally, during the divorce process, one spouse chooses to keep the SMSF, while the other establishes a new SMSF and rolls over their super balance. Alternatively, the members may decide to wind up the SMSF.
What happens to my spouse’s super benefit?
The spouse, described as the non-member spouse under the Family Law Act 1975 (FLA), has several options. Typically, with a two-member fund, the non-member spouse seeks to sever all ties with their partner and roll over their own super balance, along with any amount split from their partner, into another complying fund. This will leave the fund with a sole member.
After the payment split notice has been received, detailing how the super is to be split and ordering the non-spouse to resign as trustee or as a director of a corporate trustee, the SMSF trustee must act on the orders within 28 days of receipt.
The fund’s assets need to be valued at market value to calculate the members’ balances, tax and preservation components. The fund must have sufficient cash to make the rollover, or, if possible, an in-specie rollover (for example, transfer listed shares or property), provided the receiving fund can accept it. Lumpy assets, such as property or private unit trusts, may need to be sold before a rollover can be made, and the tax implications of any disposals considered.
The non-member spouse must provide details of their new complying fund so a rollover can be made. The FLA payment split cannot be rolled over via SuperStream (electronic rollover) and must be processed manually using the ATO’s Rollover Benefits Statement (RBS). However, the non-member’s own super balance must be rolled over using SuperStream.
Keeping my SMSF after divorce
If you have decided to keep your SMSF after divorce, there are a lot of things you need to consider and update/change to ensure you have sole control moving forward:
- Change the SMSF trustee structure if individual trustees
- Removing your spouse from being a signatory to the fund’s bank account
- Transfer shares in the trustee company, if applicable, to the remaining SMSF member
- Get your SMSF accountant and wider team to review the fund’s trust deed
- Redirect any direct contributions
- Review if changes are required in relation to any existing legal contracts, such as a limited recourse borrowing arrangement (LRBA)
- Death benefit nominations
- Reversionary pensions
- Powers of attorney
- Insurances, including life insurance and
- Estate planning
A significant issue to address is the change in the trustee structure. The non-member spouse resigns as trustee or as director of the corporate trustee. If the trustee structure was previously individual trustees, it is a pivotal time to consider moving to a corporate trustee. A sole-member fund cannot have a sole individual trustee, and at this time, you need to decide whether to appoint a new individual trustee, usually another family member, or to change to a corporate trustee, where you can be the sole director and the sole member of your SMSF. It is worth noting that on the modern world no SMSF should have individual trustees as it is simply not worth saving the trivial ASIC fee of $70 per year given all the headaches it causes around SMSF estate planning and sole purpose test issues.
The title to the fund’s assets, including the fund’s bank account, must be updated to reflect the change of trustees. If the fund has an existing corporate trustee, this process is much easier, as the title to the fund’s assets does not change. The non-member spouse resigns as a director, and the existing member can become the sole director. However, the trustee company’s constitution may need to be amended to permit a sole-director company.
The ATO must be advised of the change in membership and the change to the trustee within 28 days via the Australian Business Register, by a registered agent, by phone on 13 10 20, or using the paper form “Change of details for superannuation entities”.
Example – Keeping the fund
Keith and Victoria shared an SMSF which had a sole purpose corporate trustee, K & V White Pty Ltd. They divorced, and a superannuation agreement was entered into under the FLA to split their superannuation balances. Victoria requested that her own super balance and the amount split from Keith’s balance be rolled over into her retail complying super fund.
After the rollover was completed and following consultation with his financial planner, Keith decided to retain the SMSF. The following actions were taken:
- Victoria resigned as a director of K & V White Pty Ltd
- Victoria was removed as a bank signatory
- The share in K & V White Pty Ltd owned by Victoria was transferred to Keith
- Victoria redirected her employer contributions to her new fund
- Keith reviewed the life insurance policies owned by the fund and sought advice
- There was sufficient cash to complete the rollovers, so no assets had to be sold
- Keith had his accountant check the trustee’s constitution and make the appropriate changes so K & V White Pty Ltd could be made a sole director trustee
- The title of the fund’s assets did not need to be changed, as the trustee did not change
- The fund’s accountant advised the ATO of the change in members and to the directors of the corporate trustee
- Keith reviewed and then revoked his binding death benefit nomination and entered into a new nomination
- There were no pensions
- There were no powers of attorney
- Keith had his estate lawyer update his estate plan
Keeping your SMSF after divorce is not always straightforward, as the other party can be uncooperative. At SMSF Australia, our team can assist you with the complexities and work out solutions. Input from other professionals, such as your family lawyer, is also crucial as you need your team working together to achieve the best outcome for your fund.