Elmhurst, Illinois Retirement Account Division Lawyers

Divorce Attorneys in Elmhurst Assisting With Retirement Asset Division

Ending a marriage is enough to put most couples at odds. The mental and emotional issues involved in a divorce may already be high, but tensions can boil even hotter when high-net-worth real estate properties, business interests, and income are part of the marital estate. Retirement accounts and benefits are another common concern in these cases.

At A. Traub & Associates, we understand the challenges people face during divorce. The legal issues involved in the dissolution of a marriage can lead to fierce disputes that can add to what is already a stressful situation. Thoughtfully and carefully dividing property can help a person ensure that they can maintain long-term financial stability. Our lawyers help clients safeguard their hard-earned retirement benefits through detailed reviews of tax implications, employer policies, contribution histories, and other financial matters.

A retirement account can include contributions made over a long period, including before or during a marriage. Our attorneys know that retirement assets are not limited to their current values, and we can help determine what counts as community property while taking steps to ensure that assets will be divided fairly.

Dividing Retirement Assets During Divorce

Different types of retirement assets may need to be treated differently during the property division process. While there are many retirement benefits that may be available, state law generally treats retirement assets obtained during a couple's marriage as part of their marital property. These can include:

• Government or Military Benefits: Federal retirement programs can differ significantly from private retirement plans. Special orders may be required when one or both spouses are members of the military or government em,ployees to ensure that assets can be divided correctly.
• Pension Plans: Because pensions will be based on a person's years of service and salary history, among other factors, the present and future value of these benefits will need to be considered during a couple's divorce.
• Individual Retirement Accounts (IRAs): Both traditional and Roth IRAs may need to be addressed, and the specific division methods may differ depending on a couple's situation.
• Employer-Sponsored Retirement Programs: Contributions to 401(k) and 403(b) plans that have been made during a couple's marriage are generally subject to division, as are similar programs that allow employees to accumulate tax-deferred savings.

Addressing Pension Benefits, IRAs, and 401(k) Plans in Illinois

As mentioned above, almost any value from retirement benefits and accounts can be divided during a divorce. Based on the decisions made in property settlements, funds can be split in a number of different ways, including equal divisions between spouses or other percentages. Since retirement accounts are designed to support a person after they retire, withdrawing funds early may lead to taxes or penalties.

When allocating pension benefits and retirement accounts between spouses, the proper procedures for transferring funds will depend on the type of account and the rules it follows:

• Pensions: Because pension benefits may not be accessible until the holder's retirement, dividing these benefits can be complicated. Qualified Domestic Relations Orders (QDROs) may be used to ensure the correct distribution of pension payments upon retirement. Based on the contributions made during a couple's marriage, a court may award a percentage of the pension to the non-pension holder.
• IRAs: Retirement accounts can be transferred penalty-free through a process known as a "transfer incident to divorce." Funds can be transferred from one spouse's IRA to the other's without taxes or penalties, provided that the transfer is completed in conjunction with the divorce settlement.
• 401(k)s and Other Sponsored Plans: When dividing funds, these accounts often require a QDRO, which will direct the plan administrator to assign a portion of the account to the former spouse of the account owner. The receiving spouse can roll this amount into a retirement account of their own without taxes or penalties.

If the proper asset division methodsare not used, the values of retirement assets may be depleted. Our attorneys can make sure QDROs are created and executed correctly or that other methods are used to divide retirement accounts. Effective legal representation can make the difference between a significant financial loss and stability later in life.

Contact Our Elmhurst, IL Retirement Asset Division Attorneys

Retirement benefits can be some of the most valuable assets in a couple's marital estate. At A. Traub & Associates, our attorneys will advocate for solutions that meet our clients' needs, and we will ensure that each step in the process is handled correctly. For help maintaining financial security in the years following the end of your marriage, contact our Elmhurst, Illinois retirement asset division lawyers at 630-426-0196.