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Dividing retirement accounts in an Illinois divorce


As one goes through a divorce in Illinois, there are many issues to discuss as the couple separates their lives. These issues include child custody, visitation, child support, spousal maintenance and property division. Each one of these issues can be very complicated and take some time to resolve. It all depends on the circumstances of each divorce and each issue is very fact specific.

For instance property division can be quite simple for people who do not have many assets, but in can be quite complicated for those with many assets. Just determining what is marital property can be complicated. People may have bank accounts, retirement accounts, stock options and other assets that they owned before the marriage. So, before these assets can be divided one must determine the marital portion of each account. After that the parties can divide assets accordingly.

Retirement accounts also present another complication. Even after the division of it is settled, the parties must send a separate order to the bank in order to actually distribute the funds that were divided. These orders are known as Qualified Domestic Relation Orders (QDRO).

These orders are in association with the divorce decree and create an alternate payee for a spouse's retirement benefits, who must be the other spouse or a child. The QDRO must also direct the bank on the method and how much to distribute to the alternate payee. Many times these orders are separate from the divorce decree, but can be in the divorce decree itself. However, there are many rules governing the language of the QDRO and they can be very complicated, but are necessary to distribute funds from retirement accounts.

Many divorces in Illinois involve retirement accounts that must be divided. In order to actually distribute the funds agreed upon, the parties must have a QDRO directing the bank to disburse the funds to the other spouse. These can be complicated orders and must be done right before the bank will distribute funds. Experienced divorce attorneys understand these orders and may be able to ensure they are done correctly.

Source: United States Department of Labor, "QDROs: The division of retirement benefits through Qualified Domestic Relations Order" accessed on April 27, 2015

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