People enter into marriage in Illinois believing that theirs will be the marriage that will last. In about 50% of marriages, that is not the case. Divorce itself can be complex and property division in particular can be very involved. Many divorces are happening between older couples who have accumulated significant assets in their retirement savings accounts.
Retirement accounts are often considered marital property. As such, they are subject to division between the divorcing couple unless an instrument, such as a prenuptial agreement, is in place. In addition to being a significant part of a couple's wealth, there are also tax implications that may come into play. When negotiating a divorce settlement, it can be important to understand the implications so that the involved parties' interests are protected.
Typically, before funds from a retirement account can be distributed to a divorcing or ex-spouse, a Qualifying Domestic Relations Order (QDRO) must be issued. The QDRO is a judgment, or order, requiring the designated fund to pay child support, alimony or other designated payments to a former spouse. A QDRO can apply to any account that is protected by the Employee Retirement Income Security ACT (ERISA), which includes 401(k) accounts and pension accounts.
Property division can be among the most complex and contentious issues in a divorce, particularly if there are no minor children involved. Consulting with an experienced family law attorney in Illinois may help someone who is considering a divorce to better understand the process and what needs to take place. A knowledgeable lawyer can review a person's financial situation and assist one in reaching a settlement that is fair to all the parties involved.