Nowadays, there are numerous ways that the average citizen can plan for their retirement. You could have a 401K, an IRA, and/or a pension fund. These might even become the source of serious debate during divorce proceedings.
When a couple first gets married, they are sure they want to share not only their time but also all their assets, bank accounts, property, and anything else for the rest of their lives. However, if they decide that marriage is not the right choice and they should split up, it can be confusing trying to figure out how everything can be agreed upon even before either spouse has considered divorce seriously. If you are married but now considering divorce, an experienced Chicago, IL divorce attorney will be able to walk you through the process and give you realistic expectations about what may come in the future.
How Can I Best Prepare Myself for Retirement after Divorce?
One thing to consider when entertaining the idea of divorce is what will happen to your retirement funds. You might have pension plans, IRAs, 401(k)s, or savings accounts that you set up as your retirement plan. Do you want to split the money in any of those funds you may have with your partner? One thing is for sure: it can become very complicated to figure out how to divide retirement funds.
When spouses marry after having been single and working for several years, they come into the marriage with part of their retirement funds already earned. Any portion of your retirement funds that have been accrued during your marriage will be considered marital assets unless your prenuptial or postnuptial agreement specifically excludes retirement plans from marital property. When going through a divorce, the retirement assets might make up a significant portion of your marital net worth, depending on what savings arrangements you have been making and how long you have been working.
In general, retirement funds are divided as follows:
- They can be split by the couple, in which case a Qualified Domestic Relations Order (QDRO) might be needed to explain to the retirement fund administrator how exactly this division should be made. A QDRO is something that an experienced divorce lawyer would be able to draft for you.
- The couple can decide to have one spouse “buy out” the other spouse in exchange for marital assets of equal value.
To determine the value of your retirement funds so you can be sure you are protecting your rights, it is advisable to have our property appraised and to consult with someone who can help you take any potential tax-related implications into account.
Schedule a Free Consultation with a Chicago, IL Divorce Lawyer
If you are considering divorce and are concerned about what will happen with your retirement funds, an experienced Chicago, IL divorce attorney can answer your questions and advocate for your rights. Call NextLevel Law, P.C. by Daniel R. Hernandez, Esq. at 312-442-2225 to schedule a free consultation.