Dividing retirement assets such as 401ks, 403bs, and pensions as part of a divorce settlement require a Qualified Domestic Relations Order (QDRO). A QDRO is a legal document that divides the assets in a retirement plan between spouses.
Spouses going through divorce are advised to seek the assistance of a family law attorney to thoroughly review the QDRO to ensure that it is designed to fit within the parameters of the employer’s retirement plan. It is important that the QDRO address unique circumstances that may occur.
Following a divorce, you may need income to get back on your feet and you may be looking to the retirement fund as an option. The QDRO should address when a non-plan-owning spouse can begin receiving benefits as the employer’s retirement fund may stipulate that the plan holder initiate the starting date of the benefits.
The QDRO should contain clear provisions for the retirement funds in the event the plan holder dies, whether before distributions begin or after. It should address what will happen if the plan holding spouse named a beneficiary other than the ex-spouse. Above all, make sure that a QDRO is in place prior to finalizing your divorce, otherwise an ex-spouse’s untimely death may result in your losing the benefit altogether.
There are many financial considerations when divorcing such as who gets the family home, the financial support of children, retirement funds and more. If you have questions regarding Illinois marital asset division or other family law matters, contact the Law Offices of Ronald L. Bell for help.