Investments And Retirement Accounts: Chicago Pension, 401(k) And QDROs Lawyer
Beyond the immediate financial impact of a divorce, your plans for a secure retirement could also be at risk. During a divorce, any assets accumulated during a marriage are typically considered marital property and are subject to division between the spouses in the final divorce order. This can include financial tools for retirement, such as pensions, 401(k) accounts, IRAs, and other investments. It does not matter which spouse was the primary contributor to each account. NextLevel Law, P.C. by Daniel R. Hernandez, Esq. can help you understand which portion of your retirement savings could be subject to division during a divorce. The firm’s attorneys will help ensure that you are aware of all of your options so that you can enjoy a secure financial future after your divorce is finalized.
Understanding Retirement Account And Investment Division In Illinois
Like other assets and property, retirement savings and investments are subject to an equitable division during the divorce process. In an equitable distribution state like Illinois, marital assets will not be divided equally among the spouses; instead, they are divided equitably based on a number of factors. Contributions to accounts made before your marriage are usually designated as non-marital assets and can remain with the spouse who earned them.
For retirement plans, several complicating factors must be considered so that there is a full accounting of all assets eligible for division, which is beneficial to both spouses. A financial expert can offer a clear picture of the value of your accounts and the details that need to be considered if the funds are to be divided. You may have to consider what type of plans you are invested in, how soon you plan to retire, the vesting schedule of the plans, and any tax implications associated with early withdrawal or division of the account.
Cook County Divorce Attorney For Retirement Negotiations And Avoiding Penalties
When dividing certain retirement accounts, including pension plans, or 401(k) plans, it is necessary to secure a qualified domestic relations order (QDRO). This informs the plan administrator that the funds are being divided during a divorce and, therefore, not subject to penalties or taxes for an early withdrawal. The QDRO will include information on how the spouses or the court have decided to divide the assets. A QDRO is typically not required for traditional and Roth IRAs. However, the divorce order should still explicitly state how any IRA will be split to avoid any tax or early withdrawal penalties. For spouses in a high-asset divorce, there may be additional benefits to consider, including executive retirement plans or other bonuses.
As with other marital assets, there can be a negotiation between the spouses on what share of the investments each one could keep. The team at NextLevel Law, P.C., could help you negotiate a greater share of the retirement account in exchange for your spouse keeping a greater share of other assets or property. If you and your spouse signed a prenuptial or postnuptial agreement, this could also impact how retirement benefits or investments are distributed.
Experienced Cook County Divorce Lawyer For Investments And Retirement Account Division
For legal guidance on approaching your retirement accounts and investments during an Illinois divorce, you can trust the attorneys at NextLevel Law, P.C. by Daniel R. Hernandez, Esq.. They will help you understand your financial options, how much of your retirement savings are subject to division, and the best path toward a secure financial future post-divorce. The firm offers affordable representation and always uses flat fees, so you will know what its services cost upfront. Contact the office or call 312-442-2225 for legal services in English or Spanish. The firm provides legal services for divorce cases in Chicago and throughout Cook County.