How Are Retirement Accounts Divided in an Illinois Divorce?

 Posted on July 28, 2025 in Division of Assets

Dividing retirement accounts during divorce can be just as complex as splitting the family home or other major assets. Many people do not realize that their 401(k), IRA, pension, or other retirement savings could be considered marital property even if they have them from their own work. In Illinois, those funds may need to be divided between both spouses, even if the account is only in one spouse’s name.

As of July 2025, Illinois law continues to treat retirement accounts as part of the marital estate when contributions were made during the marriage. If you are going through a divorce, contact a knowledgeable Naperville, IL family law attorney who can explain how these accounts are valued and divided and can help protect your financial future.

What Types of Retirement Accounts Are Subject to Division in an Illinois Divorce?

Illinois law divides assets into two categories: marital and non-marital property. According to 750 ILCS 5/503 in the Illinois Marriage and Dissolution of Marriage Act, any portion of a retirement account earned during the marriage is usually considered marital property, even if the account itself is in only one spouse’s name.

The types of retirement accounts that may be divided include:

• Employer-sponsored plans like 401(k)s, 403(b)s, and pensions

• Individual retirement accounts (IRAs and Roth IRAs)

• Government or military retirement benefits

• Deferred compensation plans

If contributions began before the marriage or continued after the divorce was filed, only the portion earned during the marriage is typically subject to division. Non-marital funds may still be protected, but separating them from marital funds can require clear documentation and expert evaluation.

What Is a QDRO and Who Needs One?

To divide certain types of retirement accounts, particularly 401(k)s and pensions, the court may issue a Qualified Domestic Relations Order (QDRO). A QDRO is a legal document that tells the retirement plan administrator how to divide the account. Without a QDRO, a spouse may not be able to receive their share of retirement benefits, even if the divorce judgment says they are entitled to it.

Each retirement plan has its own QDRO requirements, and preparing one incorrectly can cause delays or even financial losses. Working with a lawyer who has experience drafting QDROs is critical.

Can Divorcing Spouses Negotiate Their Own Arrangement for Dividing Retirement Funds?

Spouses can agree to divide retirement accounts in a way that differs from a strict 50/50 split. For example, one spouse might keep the full value of a retirement account in exchange for the other spouse keeping more of the home equity or another asset of comparable value. These arrangements can be negotiated during the divorce process and included in the final settlement agreement.

However, the court must still review and approve the agreement to ensure it is fair and complies with Illinois law.

Contact a Naperville, IL Divorce Lawyer for Help with Asset Division

If you are going through a divorce and have concerns about dividing retirement accounts or other complex assets, contact a DuPage County, IL divorce attorney at Pesce Law Group, P.C. We offer free consultations and can explain how Illinois law applies to your situation. Call 630-352-2240 today to protect your retirement and your future.