Many people are concerned about divorce and pension plans and what will happen to those and any other retirement accounts upon finalization of your divorce. People seem to think that if the pension is solely in their name (which it typically is), then their pension is theirs and they do not have to share it with their spouse when they divorce.
The Courts consider this an asset of the marriage however, and you will need to divide your pension rights after divorce with your spouse. If you both have plans, and they are of equal value, then it is likely that each of you will retain your own pensions. Illinois has established that all retirement and pension plans whether vested or matured, contributory or noncontributory, shall be treated like marital property. The classification and reimbursement principles in 750 ILCS 5/503(a) and 5/503(c) apply to retirement plans and pensions and divorce in Illinois. A pension that is established before the marriage, as well as its increases in value, remains nonmarital property; however, the marital estate may be entitled to reimbursement for marital contributions or for the significant personal efforts of a spouse that result in substantial appreciation. When evaluating divorce and pension plans, the courts have noted that an interest in a pension plan is marital property if a portion accrues during the marriage. Separating 401(k) Plans, Pensions and Divorce in Illinois To understand pensions and divorce in Illinois, however, you should know that Illinois does not divide pensions equally. Pensions are treated just like any other asset of the marriage. Trial courts who divide a pension equally, without considering the factors in our statute, can be overturned by the Appellate Court. In re: Marriage of Smith, the appellate court found that the trial court failed to consider the factors in the Illinois Marriage and Dissolution of Marriage Act. Instead, the trial court’s finding that any income in the wife’s 401(k) earned during the marriage should be divided, half to each side as a matter of course and without considering the statutory factors, was an abuse of discretion. The appellate court remanded the case, instructing the trial court to consider the statutory factors in order to divide the wife’s 401(k) in just proportions. Equitable division of retirement assets, as with all other assets of the parties, requires consideration of the factors in §503(d) of the Act regarding pensions and divorce in Illinois. Divorce and Pensions Plans, Retirement Accounts and Deferred Compensation Deferred Compensations are also divided in a divorce. A deferred compensation benefit is earned by an employee for his or her service to an employer. As such, they are treated as earnings, and to the extent that a spouse earned those benefits during the marriage, they are considered marital property and are subject to division upon dissolution, like any other marital property. Contact Anderson and Boback for answers to these and all questions related to retirement accounts, 401(k) plans and pension rights after divorce. We are experienced in all family law matters and highly respected divorce attorneys with an understanding of Illinois divorce and pension plans. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/high-asset-divorce/what-happens-with-divorce-and-pension-plans/
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Whether you are about to get divorced, are in the process, or have already divorced, dividing retirement accounts in divorce properly is important and can be a little confusing. It can also be difficult dealing with the third-party agencies that handle the pension or retirement accounts. For starters, Illinois is an equitable division State which means that the marital portion of a person’s pension or retirement account will most likely be divided equally absent extenuating circumstances. Under Illinois divorce and retirement benefits laws, a judge may do an unequal division if one party has a disproportionate amount of non-marital funds such as a non-marital property or large inheritance. Absent these circumstances, the judge will divide the marital portion equally. QDRO Required for Dividing Retirement Accounts in Divorce Secondly, your judgment will have to reflect the division of the pension or retirement at division and any other necessary information such as survival benefits, specific formulas, etc. It should also reflect which party will be responsible for preparing and entering the order that will effectuate the division, also called a Qualified Domestic Relations Order (QDRO) or Qualified Illinois Domestic Relations Order (QLDRO). A QDRO or QLDRO is a separate order that needs to be entered and certified by the Judge with specific legal language regarding Illinois divorce and retirement benefits. It should include your date of marriage, date of divorce, and the percentage awarded for each party. It should also include any other permissive and non-permissive options and any survivor or death benefits. This process may take a little while as there may be some back and forth between the attorney preparing the QDRO and the agency. Once it has been approved by the agency and the order has been entered by the judge, then the order should be sent to the agency for processing. Once the order is entered, talk to the individual agency regarding the benefits and restrictions provided by the agency. You may be entitled to a lump sum payment now, or you may have to wait until your ex-husband is in pay status before you can collect. Talk to an attorney if you have any questions regarding illinois divorce and retirement benefits. Anderson and Boback are experienced divorce attorneys in Chicago, with knowledge of properly dividing retirement accounts in divorce. Contact us today for a confidential consultation and to learn more about Illinois divorce and retirement benefits. THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/property-division/dividing-retirement-accounts-in-divorce-in-illinois/ ![]() Divorces can be complicated even when both parties are in agreement and respectful of one another. High asset divorces can be exceptionally complicated and could create a contentious situation in what could otherwise be an amicable split. A large amount of assets may create a long, drawn out and complex process for dividing marital property. Improper handling of the division of your marital property could have significant implications. If you and your spouse are facing divorce and your marital property consists of assets of high net worth which may include businesses, real estate, investments and retirement accounts, it is of the utmost importance that you speak with an experienced high net worth divorce lawyer. Work with a High Net Worth Divorce Lawyer The first step in preparing for a high asset divorce is to work with an experienced high net worth divorce lawyer. An attorney that is experienced in high asset divorces will guide you with the proper procedures to follow that will protect your wealth. Your high net worth divorce attorney should have knowledge in the following areas:
Anderson and Boback for High Net Worth Property Division Anderson and Boback are high net worth divorce attorneys in Chicago with experience in complicated, complex cases. We work with you to strategize for the settlement that you deserve. Our divorce attorneys are skillful negotiators, working for the fastest, smartest and least costly divorce settlement. If your case does go to trial, we are fierce litigators in the courtroom, respected by clients and colleagues. Anderson & Boback are experienced family lawyers in Chicago with a focus on Illinois family law. We are known for skillful negotiation along with fierce litigation. We protect your interests with professional legal representation for the property division settlement that you deserve. Contact us today for a confidential consultation and take the right first step towards your financial future. |
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