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Dividing pension accounts in a divorce in Illinois


Dividing assets in a divorce can be one of the more complicated parts of an Illinois divorce. However, some assets are easier to divide than others. Tangible items, such as furniture or automobiles, can be relatively easy to divide. Dividing bank or retirement accounts with a known amount of money can be fairly easy, as well. However, some assets, such as pensions, can be a little more difficult.

One of the biggest issues that can cause a complication is that the spouse may be unable to access his pension account at the time of the divorce. The person with the pension is not entitled to any of the money until after he or she retires, which could be many years later. However, even though the spouse cannot access the money until retirement, the spouse most likely did accrue at least a portion of the account value during the marriage. That portion is marital property.

The marital portion of a pension is divided like other marital property. However, in order to divide the pension benefits, the parties must file a qualified Illinois domestic relations order (QILDRO). This order is similar to a QDRO, which is used for other retirement accounts, but there are a couple of differences. This order will direct the pension fund to pay a portion of the spouse's pension benefit to an alternate payee, i.e., the other spouse, but not until it is allowed to start making payments. It does not affect how the benefits accrue or any of the vesting requirements. The QILDRO simply directs the fund to pay a percentage of the benefit to the alternate payee, instead of to the spouse who owns the pension.

Many people in Illinois are divorced each year and many of these people have pensions. The marital portion of the pension must be divided like other assets. However, the parties must file a QILDRO in order to pay the other spouse the portion to which he or she is entitled. Experienced divorce attorneys understand how property is divided in divorces and may be a useful resource for one going through the process.

Source: Illinois General Assembly, "750 ILCS 5/503" accessed June 2, 2015

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