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Wakenight & Associates, P.C.

1100 Lake Street, Suite 120, Oak Park, IL 60301

DuPage County | 630-852-9700

Mokena | 815-727-6144   Oak Park | 708-848-3159

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How to Divide Retirement Funds During Your Illinois Divorce

Posted on in Divorce

Oak Brook divorce lawyer for retirement fund division

Most couples will experience some sort of conflict during a divorce. For many couples, the asset division process is one of the topics that bring about the most conflict. Prevailing during this process is important, because it can determine how financially stable you are after the divorce, and it can also affect your finances into the future. For many people, one of their biggest assets is their retirement account.

In Illinois, retirement funds are considered to be marital property as long as they were acquired during the marriage. Marital assets may include individual retirement accounts, non-qualified plans, defined contribution plans and accounts, and pension benefits. These retirement funds must be divided between divorcing spouses, which can become tricky. In most cases, this should be done using a Qualified Domestic Relations Order, or QDRO.

What Is a QDRO?

A QDRO is a legal document that defines how retirement assets will be split between spouses. It acts as a set of instructions to use when the time comes to disburse retirement benefits from qualified retirement plans, such as a 401(k). Using a QDRO to transfer these funds will allow ex-spouses to avoid taxes on these amounts or penalties for withdrawing funds before reaching retirement age 

As a legal document, a QDRO is enforceable by the court, just like an order for child support or spousal maintenance would be. When the time comes for the retirement funds to be disbursed and used, the QDRO will specify who will receive the funds. In many cases, the alternate payee will be the account owner’s spouse or ex-spouse, but children or other dependents may also be named as beneficiaries. Information contained in the QDRO includes:

  • Information about the plan owner and the alternate payee, including their names and addresses

  • The percentage of the available funds that will be distributed to each payee

  • How these percentages are determined

  • The number of payments that each payee will receive

  • How those payments will be disbursed to each payee

An Oak Brook, IL Asset Division Lawyer Can Help You Deal With Your Retirement Funds

Some people may forget about their retirement funds when they are going through the asset division process, especially if they are not close to retirement age. However, your retirement savings can be the key to your financial success in the future. At Wakenight & Associates, P.C., we can help you determine which retirement benefits may be considered marital property, and we can also help you draft a QDRO to properly divide these assets. Contact our skilled DuPage County property division attorneys today by calling our office at 630-852-9700 to schedule a free consultation.

Sources:

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

https://www.thebalance.com/what-s-a-qdro-2894206

https://www.investopedia.com/personal-finance/whats-qdro/

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