Chicago Division of Retirement Assets Attorney

Chicago Divorce Lawyer for QDROs and Division of 401(k)s, IRAs, and Pensions in Cook County

Getting a divorce will have a significant impact on your financial future, including your retirement plans. This is especially true considering that retirement accounts are often considered marital assets themselves, meaning that they may be split between spouses in the division of property. If you do need to divide an account, you may be at risk of losing substantial value if you do not handle it correctly.

At The Law Office of George J. Skuros, we have over 30 years of legal experience, and we have represented many clients throughout the divorce process to help them protect their retirement savings and other financial interests. We can help you reach a fair settlement with your spouse and take any steps necessary to divide your retirement accounts without suffering unnecessary losses.

Non-Marital and Marital Retirement Assets in Illinois

Married couples often have retirement savings in a number of different accounts, including IRAs, employer-sponsored 401(k)s, pension plans, and more. Some of these accounts may list both spouses as owners, while others may have been established in only one spouse's name. However, any of these accounts can qualify as marital property if contributions were made during the marriage. As a result, you could find that a retirement account that you thought belonged to you alone is subject to division in a divorce.

However, some retirement assets can be considered non-marital property as well. Contributions made to an account before the marriage or after a judgment of legal separation will belong to the spouse on whose behalf they were made, so it is important to keep detailed records of all contributions. Additionally, a prenuptial or postnuptial agreement can designate an entire retirement account as non-marital property.

QDROs and Other Options For Dividing Retirement Accounts

Even if a retirement account contains marital assets, it does not necessarily have to be split in a divorce. When there are multiple retirement accounts with similar value, perhaps one in each spouse's name, you could negotiate an agreement that grants one of them to each spouse and keeps them intact. However, if it is necessary to divide an account, simply withdrawing assets from one account and transferring them to another is usually not possible without triggering income taxes and early withdrawal penalties, which results in a loss of assets for both spouses.

Depending on the type of retirement account you need to divide, you should be sure to follow the correct process to do so without incurring these penalties. In the case of an employer-sponsored plan like a 401(k) or a 403(b), you will need to work with the court to obtain a qualified domestic relations order (QDRO). A QDRO lets the plan administrator know that the transaction is happening between spouses for an allowable reason related to the divorce. An Illinois employer-sponsored pension plan can be divided similarly by obtaining a document called a Qualified Illinois Domestic Relations Order (QILDRO), though distributions will not be made to a spouse until they are made to the employee.

On the other hand, dividing traditional and Roth IRAs between spouses usually does not require a QDRO. However, it is important to ensure that your divorce resolution clearly states the manner in which your IRAs should be divided so that the transaction is recognized as a transfer incident to divorce. Otherwise, you could be subject to early withdrawal and tax penalties similar to those you would incur when improperly dividing a 401(k).

Contact a Mount Prospect Retirement Asset Division Attorney

When dividing your retirement accounts for divorce, the counsel of a knowledgeable and experienced attorney is crucial to help you avoid making costly mistakes. Contact us today at 312-884-1222 for a free consultation to learn how we can assist with your case. We serve clients in Chicago, Mount Prospect, Arlington Heights, Inverness, Schaumburg, Des Plaines, Park Ridge, the North Shore, and throughout Cook County and surrounding areas.