Illinois couples who are entering into divorce are likely wondering what’s going to happen to the retirement account. The reality is that it depends on the type of retirement account that you have and the rules that apply to divorce in your state. In most places, your retirement accounts are considered a marital asset and is divided between you and your spouse.
Pre-marital versed post-marital contributions
Many states will recognize any contributions that you made to your retirement account prior to your marriage as separate property. Any contributions made after you were married are considered marital property. When determining the amount of your retirement that will need to be split between you and your spouse during your divorce, you’ll need to calculate up what your post-marital contributions were.
Understanding the legal forms
In most cases, your spouse will have to make a physical request to receive half of your post-marital retirement benefits. They can do this with one of two different legal forms. The form that they use will highly depend on the type of retirement account that you have. In the event that you have an IRA, they’ll need to use a Transfer Incident to Divorce form. In the event that you have a 401k, they will need a Qualified Domestic Relations Order or a QDRO for short. It’s not uncommon for divorce courts to incorrectly label the form that you need. For this reason, it’s highly advisable that you understand the legal forms that are needed for the type of retirement account that you have.
When a couple enters the divorce process, there are many different questions that they have. When it comes to what to do with their retirement accounts, most couples will need to split all their post-marital contribution benefits down the middle. It’s always advisable to get an attorney to help you with the divorce process.