Whether you can keep your pension in a divorce depends on whether it is classified as marital or non-marital property.
Understanding Pension Division in Illinois
In Illinois, pensions earned during the marriage are typically considered marital property and subject to equitable distribution. However, portions of the pension accrued before the marriage or after legal separation are classified as non-marital property and remain with the original account holder. The court evaluates the marital portion of the pension and decides how it will be divided.
Legal Context for Pension Division in Illinois
Under the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5), pensions are treated as marital property if contributions were made or benefits accrued during the marriage.
Key Considerations:
- Marital vs. Non-Marital Portions:
- Contributions made before the marriage are typically excluded from division.
- Any growth or benefits accrued during the marriage are generally considered marital property.
- Valuation of the Pension:
- The marital portion of the pension must be accurately calculated to determine its value.
- Use of a QDRO:
- A Qualified Domestic Relations Order (QDRO) may be required to divide pensions without penalties or tax implications.
Example Scenario:
If a spouse began contributing to a pension five years before the marriage and continued contributing for 10 years during the marriage, only the portion accrued during the marriage would be subject to division.
Steps to Address Pension Division During Divorce
- Determine Marital and Non-Marital Portions:
Work with a financial professional to identify the portion of the pension that is marital property. - Value the Pension:
Obtain an accurate valuation of the pension benefits accrued during the marriage. - Negotiate Division Options:
Discuss potential outcomes with your spouse, such as a buyout, division of benefits, or awarding other assets in exchange. - Draft a QDRO (if applicable):
If the pension is to be divided, a QDRO must be prepared and approved by the court. - Follow the Court’s Decision:
Comply with the court’s orders regarding pension division or offsetting arrangements.
How Attorneys Can Help
An experienced family law attorney can:
- Help classify pensions as marital or non-marital property.
- Collaborate with financial professionals to calculate the marital portion of the pension.
- Draft and file a QDRO to ensure proper division.
- Negotiate equitable solutions to protect your financial interests.
Need Help Protecting Your Pension?
Call (630) 366-1760 to consult with a family law attorney. We’ll guide you through the pension division process and work to safeguard your financial future during your divorce.
Disclaimer: This page provides general information and is not intended as legal advice. For personalized assistance, consult a licensed attorney.
The article was first published at https://familylawnapervilleil.com/faqs/can-i-keep-my-pension-in-a-divorce/
