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Dividing Benefits in an Illinois Divorce

Naperville Family Law Attorney

Naperville IL divorce lawyerA key part of any divorce is the division of the couple's marital assets. This means that everything the couple purchased or developed after they were married must be divided between them equitably in divorce court. This includes retirement benefits, such as 401(k)s, IRAs, and SEPs. The only exception to the state's division rules is property that one party received as a gift or through inheritance. This property is retained in whole by the party that received it.

In Illinois, divorcing couples' property is divided according to the principle of equitable distribution. This means that rather than dividing the couple's assets 50/50, the court determines a fair way to divide the couple's net worth among them according to certain criteria including, but not limited to, the length of their marriage, the financial and personal sacrifices each partner made for the marriage's benefit, each partner's financial contribution to the marriage, and each partner's projected personal and financial needs following the divorce. If you are considering filing for divorce, contact an experienced divorce attorney to discuss property division as well as other issues that might be part of your divorce settlement, such as spousal maintenance and child support.

How Are Retirement Benefits Divided in an Illinois Divorce?

Retirement benefits are treated somewhat differently from other marital assets, such as the couple's home, because they are not tangible assets. Instead, they are financial assets that could potentially continue to grow after the divorce, especially if the partner who owns the benefits is still working. Like tangible assets, they are divided according to equitable distribution rules. But rather than simply giving a party a portion of the money contained in a retirement account, the court might require that the money be paid out to the receiving spouse or child over the course of years in the form of spousal maintenance or child support.

Qualified Domestic Relations Orders (QDROs)

A Qualified Domestic Relations Order (QDRO) is a legal order that changes a retirement plan's ownership to allow an individual other than its original owner to benefit from its funds. Normally, QDROs are entered in order to allow a former spouse or an individual's child to take some of the money contained within them. Individuals who benefit from a retirement plan after a QDRO are known as alternate payees. A QDRO may be signed before or after a couple's divorce is finalized, and it must be written in concise language that leaves no room for varying interpretation.

QDROs alter each type of retirement plan differently. For example, an additional recipient's name may be added to a pension plan through a QDRO. With a 401(k), the funds contained within the account are rolled over to a new account in the alternate payee's name with a QDRO.

QDROs are not used to divide an IRA or SEP. They are also not used to divide military benefits or pensions for government employees. State government employees' pensions are governed by the Illinois Pension Code, and military benefits have their own sets of rules governing their division in a divorce.

Illinois Mediation and Collaborative Law

If you decide to divorce through mediation or collaborative law, you might be able to avoid having the court impose a QDRO on your case. This is because in these types of divorces, the couple works together to determine the terms of their settlement. If you and your spouse agree to take this route and work together to divorce, you can maintain a greater control over how your assets are divided. For example, you might want to keep your pension in its entirety in exchange for your spouse taking full ownership of your home. If the house and the pension are of approximately equal value, this can be a viable option for you.

DuPage County Divorce Attorneys

During your divorce, dividing your property can be a long, arduous process. Make it easier by working with an experienced DuPage County divorce attorney. Contact Pesce Law Group, P.C. today at 630-352-2240 to schedule your legal consultation with a member of our firm, during which you will have the opportunity to discuss your concerns about your property division, your individual circumstances, and how your divorce could potentially play out in court. We can answer questions you have about specific laws in Illinois as well as more general issues about property division and the divorce process.

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