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Four Steps for Dividing Retirement Assets in DivorceRetirement assets grow in importance as marital property the longer you are married. If you divorce after several years of marriage, they could be one of the most valuable properties you own. As with all marital properties, you must include your retirement benefits as part of your division of property, and figuring out how to do so will be one of the most complicated parts of the divorce process. In general, there are four steps to determining how you will divide your retirement benefits as part of your divorce agreement:

  1. Valuing Your Benefits: To start, you need to know the current value of your retirement benefits. Retirement accounts are classified as defined contribution plans and defined benefit plans. It is easier to determine the value of a defined contribution plan because it is an individual account that you are paying into. With a defined benefit plan, your retirement benefits are part of a group account that will pay you based on a formula, and estimating its value is based on your life expectancy and the account's interest rates.
  2. Identifying the Marital Portion: Once you know the value of your retirement benefits, you must determine how much of it counts as marital property. The amount that your retirement benefits increased in value during your marriage is the amount that is marital property. Increases can come from your contributions to the plan, interest accrued on your holdings, and investments made with the money. The cut-off date determines when you stop counting increases in value towards your marital property. In Illinois, the date that a couple separates is usually the cut-off date.
  3. Dividing the Benefits: Because Illinois is an equitable division state, you do not have to divide your marital retirement benefits evenly between each other. When a divorce court determines whether the division of retirement benefits is equitable, they will consider the duration of the marriage and the economic resources of each spouse. You may be able to keep all of your retirement benefits in exchange for other marital properties, such as your home.
  4. Transferring Benefits: With many retirement plans, people are entitled to benefits based on being an employee or member of an organization. In order to receive benefits that you would not otherwise be entitled to, you will need a court order to transfer a portion of these benefits. A Qualified Domestic Relations Order is for private retirement benefits, such as a business’ retirement plan. A Qualified Illinois Domestic Relations Order is for retirement benefits provided by the Illinois state government. A Military Retired Benefit Division Order is for anyone who receives retirement pay because of their military service.

Contact a Kane County Divorce Lawyer

Dividing retirement benefits as part of your divorce may take the combined efforts of your divorce lawyer and a financial professional, such as an actuary. A St. Charles, Illinois, divorce attorney at Goostree Law Group will determine how to include your retirement benefits as part of your divorce while still protecting them. Schedule a free consultation by calling 630-584-4800.

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Posted on in Over 50

divorce-after-50We are living in a much different America than the one in which our parents and grandparents lived. Not only are we living and working longer, issues like divorce, remarriage, and parenting after divorce are no longer taboo to discuss and seek help with handling.

Gray divorce, divorces between couples who are aged 50 and older, have seen a dramatic increase in recent years. Many of these couples are in their first marriages, finding that they no longer want to remain married after decades together. Other couples in this category are ending their second or subsequent marriages, finding themselves facing challenges they did not face with their first divorces. If you are over the age of 50 and considering filing for divorce, understand the issues that are relevant to your situation by working with an experienced divorce attorney.

How Divorce Will Affect Your Retirement Benefits

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Posted on in Division of Property

b2ap3_thumbnail_QDRO.jpgA qualified domestic relations order (QDRO) is a legal order that allows an individual to receive money from a retirement account that he or she does not own. This order allows the court to alter a retirement plan's ownership to allow this transfer of money during or after a divorce. When an additional party becomes named as an owner of a retirement plan through a QDRO, he or she becomes known as an alternate payee.

The court may order that a couple sign a QDRO as part of their divorce. This document is a key part of the division of the couple's property – retirement accounts are generally considered to be marital property. Signing a QDRO is a way for the court to guarantee that the spouse whose name is not listed on the retirement account can receive a fair share of the money contained within the account. It can also be used to ensure that the owner's child can benefit from the money contained within the account through child support payments or property transfers.

Dividing a Retirement Plan through a QDRO

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