Divorce Attorneys in Schaumburg, Illinois
Providing Legal Assistance in Protecting Retirement Assets During Divorce
Dealing with the stress of going through a Divorce is difficult enough without also having to worry about Property Asset Division. What many people do not realize is that asset division includes retirement benefits. In other words, in many circumstances, retirement assets can be considered marital property, which the court will divide equitably.
Understanding how the law works in Illinois is crucial if you are going through a divorce and are concerned about your retirement benefits and other assets. Working with an experienced divorce attorney who has handled complex divorce cases can help ensure that your retirement assets are protected throughout the process. Contact our office today to find out how we can help.
The Law in Illinois
In Illinois, “marital property” is defined as all property (including debts and other obligations) acquired by either spouse subsequent to the marriage except the following (which is considered to be “non-marital” property):
- Property acquired by gift, legacy, or descent;
- Property acquired in exchange for property acquired before the marriage;
- Property acquired by a spouse after a judgment of legal separation;
- Property excluded by valid agreement of the parties, such as a prenuptial agreement;
- Any judgment or property obtained by judgment awarded to a spouse from the other spouse (with exceptions);
- Property acquired before the marriage, except as it relates to retirement plans that may have both marital and non-marital characteristics; and
- The increase in value of non-marital property.
This means that if your 401(k) (or similar retirement benefit) plan contains deposits made with marital funds, any money made in that 401(k) plan is considered to be marital property. However, any funds that were in the account prior to the marriage would be considered non-marital property. In order for a spouse to claim these funds as non-marital property, he or she would need to work with an attorney to trace those funds and prove that they were acquired prior to the marriage.
Under the Illinois Marriage and Dissolution of Marriage Act, the court must consider all relevant factors that appear reasonable and necessary in terms of deciding what is an equitable division of marital property, including:
- The income and property of each property;
- The needs of each party;
- The realistic earning capacity of each party;
- Any impairment which could interfere with the earning capacity of either party;
- The standard of living established during the marriage;
- The degree of complexity of the issues, including parental responsibility, any businesses owned, etc.; and
- Various other factors, including those necessary to be just and equitable.
For any retirement assets that are not part of an IRA or SEP but are considered to be part of the marital estate, the court must abide by a Qualified Domestic Relations Order in order for the recipient spouse to be able to place these funds into a separate retirement account and avoid any penalties associated with withdrawing retirement funds early. However, any and all retirement assets must be allotted in accordance with the Internal Revenue Code in order to be tax- and penalty-free, thus working with an experienced attorney in crafting your divorce decree is key in order to ensure that this is all done properly and in accordance with the law.
Experienced Attorneys for Divorces Involving Retirement Assets
When dealing with retirement assets during a divorce, it is important that you seek the support of nationally-recognized, tried and tested legal professionals who have experience working with these complex issues.