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Will County asset division attorney

Retirement accounts are frequently among the most important assets involved in an Illinois divorce case. If pension benefits are earned by either spouse during the course of a marriage, they are considered marital property. So in the event of a divorce, a judge may issue a Qualified Domestic Relations Order (QDRO), which enables the division and transfer of retirement funds without incurring any legal penalties.

Appeals Court: Divorce Settlement Did Not Refer to Former Husband’s Disability Pay

A recent decision from the Illinois First District Appellate Court raised an interesting question related to divorce and retirement benefits–namely, does a QDRO affecting a former spouse’s pension also apply to any pre-retirement disability benefits they receive?
The facts of this case, In re Marriage of Sullivan, are fairly straightforward. A husband and wife divorced after nearly 13 years of marriage. During the marriage, the husband acquired pension benefits through several plans. Based on a marital settlement agreement (MSA) negotiated between the parties, a Cook County judge entered a QDRO, giving the wife 50 percent of all listed pensions.
After the judge entered the order and the divorce was final, the now-former husband applied for Social Security Disability insurance benefits. This was necessary so that he could also receive long-term disability benefits under his pension plans. When the former wife learned of this, she went back to court, arguing that she was also entitled to 50 percent of the disability benefits. The former husband argued the MSA and QDRO only applied to retirement benefits, not disability.
The courts sided with the former husband. The First District, affirming a Cook County judge’s prior ruling, noted that the “absence of an express or even implied reference to disability or disability benefits” strongly suggested that the “parties did not contemplate benefits at the time of dissolution.” Indeed, the agreement and QDRO only intended for the former wife to share in the former husband’s “retirement benefits.
The way that disability works, the former husband will receive those disability benefits until he reaches his normal retirement age of 65, at which point those benefits convert into the pension. So as the appeals court explained, had the former husband “never become disabled, he would not be receiving any payments” from his disability plan.

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