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DuPage County Retirement Account Division Lawyer

Bolingbrook QDRO attorney 401(k) pension division

Divorce Attorneys for Pension Benefits and QDROs in Naperville and Plainfield

During your divorce, the property division process can be difficult and fraught with emotion. The possessions you own often have sentimental value, and determining how to split them up in a way you and your spouse can agree on can lead to contentious disputes. However, in addition to addressing physical belongings, you will also want to be sure to handle financial matters correctly, including dividing the money you have saved. To ensure that you will have the means to support yourself later in your life, you will need to determine how to divide retirement accounts and/or pension benefits.

At the Law Office of Ronald L. Hendrix, P.C., we will work with you to find the best way to resolve the legal and financial issues involved in ending your marriage. We have worked with spouses in a wide variety of complex divorce cases, and whether you are a young adult, a parent who needs to address child issues, or a person who is in or near retirement, we can ensure that your rights and financial interests are protected in the decisions made about your retirement savings. 

Retirement Benefits and QDROs

Retirements accounts or benefits created, earned, or added to during a couple's marriage will be considered marital property. This means that they will need to be divided between the spouses during divorce. The methods of doing so will differ depending on whether an asset is a defined contribution plan or a defined benefit plan.

Defined contribution plans are often fairly simple to address, since they consist of a balance in an account. These assets may include employer-sponsored retirement plans such as a 401(k) or individually-created accounts such as an IRA. The funds in these accounts may be split equally between spouses, or other percentages may be used depending on how other marital assets are divided. When dividing funds in an account, a Qualified Domestic Relations Order (QDRO) is used. This allows the funds to be transferred without paying penalties for early withdrawal, and if the money is rolled over into another retirement account, the recipient of the funds will not be required to pay any taxes.

Defined benefit plans, such as employer-sponsored pensions, can be somewhat more difficult to divide, since the actual amount of the benefits that will be determined to be marital may be unknown at the time of divorce. Typically, a certain percentage of pension benefits will be considered marital property, depending on the amount of time a couple was married while benefits were being earned. For example, if one spouse worked a total of 30 years in a position where they were eligible to receive pension benefits, and the couple was married for 15 of those years, 50% of the pension benefits would be considered marital property, and the participant's ex-spouse would be entitled to receive 50% of that portion of the benefits, or 25% of the total benefits. It is important that a proper valuation of the defined benefit is achieved, and the proper benefit is determined.

As with defined contribution plans, a QDRO is used to specify how pension benefits should be divided, although a Qualified Illinois Domestic Relations Order (QILDRO) will be used for benefits earned by state employees. A QDRO or QILDRO will specify the percentage of benefits that should be paid to a participant's ex-spouse once benefits begin being paid out. Obtaining a QDRO or QILDRO involves working with the Plan Administrator to craft an Order that meets all the specific requirements of the plan in question.

Contact Our Will County Property Division Attorneys

Determining how to handle retirement savings or benefits can be a difficult task for divorcing spouses, especially when they are considered alongside all of the other financial issues that must be addressed. By making the right decisions during your divorce, you can protect your future and ensure that you will have the financial resources you need. For legal help with the division of retirement benefits, contact the Law Office of Ronald L. Hendrix, P.C. at 630-416-7004 or 815-722-7050 to arrange a free consultation. We assist with divorce cases in DuPage County, Will County, Kendall County, and Kane County, including Naperville, Bolingbrook, and Plainfield.

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