Division of Retirement Assets
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A large portion of divorcing couples' assets are often held in retirement accounts, including 401(k) and IRA accounts. It's important, then, to know how your retirement assets will likely be viewed and divided by family law judges under Illinois law.
How Retirement Accounts Are Divided During Divorce
Courts wish to give both spouses an equal chance to build sufficient retirement reserves and, consequently, retirement assets are typically divided equally. When the division of other assets needs to be equalized, retirement accounts can sometimes be used to offset other assets. Retirement assets, though, have less value than cash, stocks or bonds because:
- Owners pay a penalty if the account is liquidated before retirement age
- Owners will pay tax when cashing out or drawing on the account
How Qualified Domestic Relations Orders can be Used for More Immediate Retirement Asset Division
Courts, by court order, can use Qualified Domestic Relations Orders (QDROs) to disperse retirement funds before retirement age at the time of divorce without penalty. Both the plan itself or funds that will be dispersed from the plan can be dispersed under a QDRO.
Legal Help in Protecting Your Rights and Achieving a Resolution
At the Chicago law firm of the Law Offices of Elliot Heidelberger, our two-member attorney team has handled hundreds of divorce cases involving the division of retirement assets. We handle high- and low-net-worth estates and are experienced in handling cases involving federal retirement benefits, railroad benefits, military benefits, Social Security benefits and more. To learn more, contact a lawyer at our Hanover Park or downtown Chicago offices by calling 630-289-4000, 847-289-4000, or 312-443-8003.
