How Will a Retirement Account Be Divided in an Illinois Divorce?

 Posted on August 18, 2020 in Division of Property in Illinois

Although you can make many settlements in a divorce decree such as child support, alimony, and custody, a settlement on the division of assets that includes retirement accounts does not guarantee that the spouse without a retirement account of his or her own will get the payments that he or she is owed. If your spouse was the primary breadwinner and you are trying to ensure that you receive payments from his or her retirement account, you will need a Qualified Domestic Relations Order (QDRO, pronounced “quad row”) to make their employer pay you what you are owed. 

Understanding a QDRO

Even if your divorce agreement provides you with a particular portion of your spouse's retirement funds, you may experience some setbacks without a QDRO. For instance, withdrawing funds from a spouse’s retirement account without the protection of a QDRO could result in penalties. You should plan to draft a QDRO in most cases, but if your spouse’s retirement account is not IRS tax-qualified and covered by the Employee Retirement Income Security Act, a QDRO is not applicable. Military and government pensions are not IRS tax-qualified, so a QDRO will serve you no purpose in that case. 

How Do I Get a QDRO in Illinois?

Part of why a QDRO can help guarantee that a retirement plan provider complies with your marital separation agreement is that the retirement plan’s plan administrator will be involved during the drafting process. In many instances, your spouse’s retirement plan provider will have standard QDRO forms. If the provisions you need to state are highly detailed and your stakes in your spouse’s retirement plan are significant, you may want to create a QDRO of your own. In either case, working with a skilled divorce attorney will help protect your rights to your fair share.

If your spouse has a defined contribution plan like a 401k, it will be relatively simple for your attorney to determine how those assets should be divided. Pensions and other defined benefit plans are difficult to divide because your attorney will probably need to discover your share of the assets with an actuary’s help. 

Note that retirement assets are treated like other assets: There will be a distinction between marital and non-marital assets. For example, the funds with which your spouse entered your marriage may be considered non-marital property, and they may not be subject to division. 

The timing, frequency, and quantity of your payments will depend on your spouse’s retirement plan’s nature. Either the plan provider or your attorney can help you make sense of the details in your case.

Contact a Plainfield, IL Asset Division Lawyer

Dividing assets during divorce can be complicated depending on the amount of savings and the type of plan. Still, you can better understand how your and your spouse’s retirement assets will be distributed with the help of a Will County divorce attorney. At the Law Offices of Tedone & Morton, P.C., we pride ourselves on the years of experience we have in helping our clients fight for their fair share of the marital assets during a divorce. To learn more about how we can help you, call our Joliet office at 815-666-1285 or our Plainfield office at 815-733-5350 to schedule your free consultation.

Sources:

https://www.thebalance.com/how-retirement-plan-assets-are-divided-in-a-divorce-1289260

https://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2086&ChapterID=59

https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=075000050K503

https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=004000050K1-119