You have probably put a little bit of money into your retirement account every week for years, if not decades. Whether you have a pension partially funded by your employer or a 401(k), your retirement savings may represent multiple years of your salary or possibly even more money than the equity you have accrued in your home.
If you file for divorce, you may have to share your retirement account with your spouse or make a claim against their retirement savings or pension. How do you split retirement savings in an Illinois divorce?
There are numerous possible solutions to splitting retirement savings
Every family situation is different. The state does not dictate how you split your retirement account, nor does it actually require that you divide the account. Instead, when a judge divides property in Illinois, they must reach an equitable solution for balancing out a couple’s debts and assets. They will generally take into account the value of retirement savings accrued during the marriage and each spouse’s contributions — directly or indirectly.
A judge might order you to divide the account, or they might use other assets of equivalent value to arrange for a fair solution. They could also order support as a way of sharing a pension. If you have to divide the account, you will do so using a qualified domestic relations order that allows you to avoid tax penalties.
You don’t have to litigate your property division
Those who feel strongly about securing a particular outcome regarding their retirement accounts may not want to litigate. They may be able to negotiate a settlement with their spouses that ensures a specific outcome.
Learning the basics about property division rules in Illinois can help you plan a way forward in your divorce.
