When going through a divorce in Illinois, dividing assets like pensions and 401(k) plans can be complex. A Chicago divorce lawyer plays a key role in making sure these retirement accounts are handled fairly and according to the law.
Retirement plans are marital assets
In Illinois, most retirement savings earned during the marriage are considered marital property. This means both spouses have a right to a share, even if only one spouse’s name is on the account.
Pensions, 401(k) plans, IRAs, and other retirement accounts are often among the largest assets a couple has. Splitting these fairly requires careful planning. A skilled divorce attorney will help gather financial records, calculate what portion of each account is marital, and then determine how to divide them.
What is a QDRO?
To divide a pension or 401(k) plan, a court order is not enough. Most retirement plans need a special legal document called a Qualified Domestic Relations Order, or QDRO.
A QDRO tells the plan administrator how to divide the retirement account between the spouses. It must follow federal law (ERISA) and match the terms of the divorce agreement. Without a QDRO, the spouse who is supposed to receive a share may never get it.
A QDRO:
- Lists both parties and the retirement plan
- States how the benefits are to be divided
- Is reviewed and approved by the plan administrator
- Must be signed by a judge
Your lawyer will work with a QDRO specialist or prepare one themselves, depending on the case. It is important that the QDRO is accurate. A mistake could delay payment or even cost one spouse their share of the benefits.
How a Chicago divorce lawyer helps
A divorce lawyer in Chicago does more than just draft legal papers. When it comes to pensions and 401(k)s, they:
- Identify all retirement accounts
- Determine what part of each account is marital
- Work with financial professionals if needed
- Prepare or review the QDRO
- Coordinate with the plan administrator
- Ensure the court approves the QDRO
- Make sure the receiving spouse’s rights are protected
Some plans have strict rules. Others take months to review QDROs. A good lawyer understands these issues and can avoid delays or disputes.
Timing matters
QDROs should be prepared and filed as soon as possible after the divorce is final. Waiting too long can cause problems. For example, if the plan participant retires or dies before the QDRO is filed, the other spouse may lose their rights.
Also, 401(k) plans can lose value over time due to market changes. A delay in dividing the account could lead to unequal results.
Protecting your financial future
If you are getting divorced in Illinois and your spouse has a retirement plan, do not assume you will automatically receive your share. The process requires legal steps and a clear plan. A Chicago divorce lawyer who understands QDROs and asset division will help you protect your future.
Dividing retirement accounts may seem complex, but the right legal support can make it manageable. If you need help, speak with a lawyer who has experience with high-asset divorces and retirement plans. These are not assets you want to leave to chance.
