How Can I Protect My Retirement Savings in an Illinois Divorce?

 Posted on September 04, 2020 in Asset Division

When you decide to get a divorce, you may be surprised to learn that retirement accounts, including IRAs, 401(k)s, and pensions, are usually considered marital property and are therefore subject to division, regardless of whose name the account is under. This can be especially challenging for older couples who have often accumulated significant savings and are planning to retire in the near future. In order to protect your retirement savings, it is important to hire an experienced attorney who can help you minimize losses during the divorce process.

Keeping Retirement Funds Safe During the Divorce Process

With the assistance of an attorney, there are several actions you can take to protect your retirement savings in the event of a divorce, including:

• Establishing a prenuptial or postnuptial agreement: If you have significant retirement savings before getting married, it may be beneficial to create a prenuptial agreement with your partner that clarifies what will happen to those funds in a divorce. You can also modify your prenuptial agreement or create a postnuptial agreement during your marriage as your financial circumstances change.

• Identifying non-marital assets: When a divorce is imminent, you should review your records to identify any funds that you contributed to your retirement accounts before your marriage. These are usually considered non-marital assets and are not subject to division. 

• Obtaining a QDRO: When you have a 401(k) or a pension, you usually need to obtain a Qualified Domestic Relations Order (QDRO) in order to transfer funds between spouses without incurring excessive taxes or early withdrawal penalties. In many cases, the funds can be transferred to another retirement account in the other spouse’s name.

• Taking advantage of IRAs: If you and your spouse both already have IRAs, the division of retirement assets may be easier. As long as you follow the appropriate procedures, you can transfer funds from your account to your spouse’s without incurring penalties and without the need for a QDRO.

Whether you were the primary breadwinner in your family, or you relied on your spouse’s income to fund retirement savings, an attorney can represent you to work toward a fair distribution of retirement assets that leaves you in a stable position upon retirement.

Contact a DuPage County Asset Division Attorney

At Andrew Cores Family Law Group, we are committed to helping you through your divorce with as little stress as possible. We will work to protect your retirement savings and other financial assets so you can look to the future without fear. Contact a compassionate Wheaton divorce lawyer today at 630-871-1002 to request a free consultation.

Sources:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

https://www.thebalance.com/how-retirement-plan-assets-are-divided-in-a-divorce-1289260