Oak Brook Divorce Lawyer Assisting With Division of Retirement and Investment Accounts

When a marriage ends, untangling shared finances can be one of the greatest challenges of the process. Retirement and investment accounts represent some of the most significant assets many couples acquire, built over years of hard work and planning. Dividing these accounts comes with unique complications and requires careful legal guidance to protect your financial future. With Goodman Law Firm as your supportive legal partner, you can approach this process with clarity and confidence to create a fair and secure outcome.

Determining Marital vs. Separate Property

In Illinois, property division follows the principle of “equitable distribution” of marital property. Thus, the first step in dividing any asset during a divorce is to determine whether it is marital or separate property.

• Marital Property includes nearly all assets and income acquired by either spouse during the marriage. This is true even if the asset is only in one person’s name. There is a legal presumption that property acquired during the marriage is marital.
• Separate Property typically includes assets owned by one spouse before the marriage or property acquired by gift or inheritance during the marriage, as long as it was kept separate.

When it comes to retirement accounts, any contributions made and growth that occurred during the marriage are generally considered marital property. Even if you had a 401(k) or investment portfolio before you were married, the increase in its value during the marriage is likely subject to division.

The Specifics of Dividing Retirement Accounts

Unlike dividing a simple bank account, splitting retirement funds and pensions is a highly technical process. These accounts are governed by specific federal and state laws, and failure to follow the correct procedures can result in tax penalties and other complications.

To divide these accounts, a Qualified Domestic Relations Order (QDRO) becomes essential. A QDRO is a special court order that recognizes a former spouse’s right to receive a portion of a retirement plan’s benefits. For state-managed plans, a similar order called a Qualified Illinois Domestic Relations Order (QILDRO) is used. These orders instruct the plan administrator on how to divide the account.

Each retirement plan has its own specific rules and requirements for drafting these documents. A small error can lead to the order being rejected, underscoring the need for knowledgeable legal aid.

Considerations for Dividing Investment Accounts

Investment accounts and portfolios add another layer of complexity to asset division. Unlike retirement accounts, investment accounts do not typically require a QDRO, but they demand careful attention to several important factors, such as market fluctuations, tax implications, asset liquidity, and the regulations governing different account types. When properly addressed, these considerations can help determine an equitable and efficient distribution of your investment assets, preserving both immediate and long-term financial interests.

Professional Guidance is Crucial

Successfully dividing retirement and investment assets requires more than just filling out a form. It demands a strategic approach involving:

• Accurate Valuation: We can work with financial experts to determine the precise marital value of each account, ensuring a fair assessment.
• Skillful Drafting: With over 20 years of family law experience, we understand the nuanced requirements for drafting QDROs and QILDROs for retirement plans.
• Strategic Negotiation: We help you understand your options for dividing these accounts. It may be better to negotiate for other assets of equal value to keep your retirement account or portfolio intact, or it may be more beneficial to proceed with a division. We guide you toward the solution that best protects your long-term security.

Speak With an Oak Brook Retirement and Investment Accounts in Divorce Lawyer Today

Your financial future is too important to leave to chance or ambiguous agreements. Having an experienced lawyer manage the details of this legal process can provide invaluable peace of mind. Contact Goodman Law Firm to schedule a consultation and learn how we can help you secure the assets you have rightfully earned.