Are you entitled to your spouse's retirement accounts in a divorce?
The answer: it depends.
You will likely hear the words “marital portion” when the Courts consider retirement accounts in a divorce. This means the portion of the retirement account that accrued during the marriage.
For example, if your spouse has worked for the City of Chicago for 10 years and will receive a pension, and you have been married for 5 years, the “marital portion” would likely be from the date of marriage through the date of your Judgment for Dissolution of Marriage. In this case, only a portion of the pension is considered marital – 5 years.
Comparatively, if you have been married for five years and your spouse has been contributing to a 401(k) for the past two years, the entire 401(k) balance would likely be considered marital.
Is the marital portion of a retirement account always split 50/50?
No, not always.
The Courts consider an equitable rather than an equal split when distributing retirement accounts in a divorce. Depending on several factors, including the division of other assets, whether or not you have any retirement accounts, and your contribution to excelling your spouse's career, you may be entitled to more than 50% of your spouse's retirement accounts.
How do I get paid?
The payout of funds from your spouse's retirement account in a divorce is executed on or after the date of your Judgment for Dissolution of Marriage, through a ”Qualified Domestic Relations Order” (“QDRO”). The QDRO is signed by both parties, entered with the Court, and sent to the Plan Administrator.
The payout or transfer of funds, which may include taxes or penalties, vary significantly between retirement accounts. You will want to consult with your attorney as well as the Plan Administrators directly, to make an informed decision and understand the nuances of each account.
At The Diggs Law Firm, we are easily accessible for questions regarding your case and amicably yet aggressively negotiate so you receive your fair share of the marital assets.
Contact The Diggs Law Firm today to Get Your Voice Heard: 312-380-1070.
Written by: Erik B. Diggs