Do I Have to Share My Retirement Savings with My Spouse If We Divorce?
When a couple divorces, they must determine how to divide the property they accumulated during the marriage. According to Illinois law, nearly every asset that a couple obtains during the marriage is considered marital property in a divorce. Assets that were obtained before the divorce are nonmarital or separate property – with some exceptions.
If you are getting divorced, you may have questions about how your retirement assets will be handled. You may ask, “Does my spouse get a portion of my retirement funds?” Or “Will I have enough money to retire if I get divorced?”
Who Gets Retirement Savings?
If you are like many people planning to divorce, you may assume that your retirement savings are yours alone. After all, your retirement assets were earned based on your hard work. However, retirement assets are typically treated just like any other asset during divorce. Unless you have a prenuptial agreement or another type of marital agreement that gives you sole ownership over retirement assets, any assets you earned during your marriage are likely marital property. This means that your spouse does have a right to an equitable share of the retirement assets. Assets that you earned before you got married are non-marital assets.
Addressing Retirement Assets in an Illinois Divorce
The way retirement assets are handled in a divorce may depend on the type of retirement asset. You may have retirement savings in the form of:
- 401(k) plans
- Individual Retirement Arrangements (IRA)
- Savings Incentive Match Plans for Employees
- Employee Stock Ownership
- Simplified Employee Pension
Some retirement accounts are easier to value and divide than others. For example, the final value of a spouse’s pension may be unknown at the time of divorce if he or she has not yet reached retirement. Other types of retirement accounts may be divided using a Qualified Domestic Relations Order (QDRO).
Some spouses choose not to divide retirement assets. Instead, they negotiate a property division agreement in which one spouse keeps retirement funds, but the other spouse keeps other assets of equal value. An experienced divorce attorney can help you decide the best way to handle retirement assets in your divorce.
Contact a Kane County Divorce Attorney
Retirement assets must be addressed during your divorce. At MKFM Law, our St. Charles divorce lawyers understand the complexities associated with valuing and dividing retirement resources. We can help you evaluate your options and pursue the course of action that makes the most sense given your financial circumstances. Call us at 630-665-7300 today for a confidential consultation.