Throughout your marriage, you and your spouse accumulate many assets, and during a divorce, you must split your valuables equitably.
Retirement plans are often among people’s most valuable property. If you have savings set aside for your senior years, you should understand how a divorce in Illinois will impact those funds.
Is your retirement account a marital asset?
As with most assets, any savings you accumulate before the marriage are not considered marital property. Any contributions made after your union are marital property unless you have a pre-nuptial or post-nuptial agreement that excludes the account. Illinois treats these contributions like any other marital property.
How is the account divided?
Typically, a divorcing couple either divides the savings at retirement or one spouse buys the other out of the plan. If the latter, one spouse usually obtains marital property with a value equal to his or her interest.
Most plans require a Qualified Domestic Relations Order (QDRO) to split the asset. A QDRO is a court order that provides the plan administrator with instructions on how to apportion the account among the divorcing parties.
What other factors affect retirement funds?
Retirement accounts are complex assets. The value of your plan can fluctuate greatly over a short period of time, and taxes can also affect how much your retirement funds are worth. These factors can have significant implications for division during divorce.
Because appraisal is often difficult, you should make sure you understand the true value of your account so you can achieve an ideal result during your divorce.