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During a divorce, retirement accounts are split according to the provisions of state law. Illinois is an equitable division state, which means that dividing property is based on principles of fairness rather than 50/50 splits.

The first step for a judge when dividing a retirement account such as a 401(k) is to decide whether the funds are marital or separate property. Marital property includes assets that were accumulated during the marriage. In the context of a retirement account, this means the contributions made by each spouse during the marriage. Next, the judge must decide how the marital assets in the account should be divided fairly.

Judges may look at many factors when deciding how to divide property fairly, including the earning abilities of each spouse, the amount of assets held in the retirement account and the length of the marriage. Instead of having a judge decide how property should be divided in a divorce, spouses can negotiate a settlement agreement and choose how to divide the property between themselves.

To move property out of a 401(k) regardless of whether it is divided via agreement or by a court, the parties must obtain a Qualified Domestic Relations Order (QDRO). A judge must sign the order, and it must be sent to the administrator of the 401(k) before any money can be transferred.

An attorney with experience in family law may be able to help a client who is seeking advice about dividing a 401(k). Rules regarding the division of retirement accounts are complex since retirement plan administrators must strictly comply with the Employment Retirement Income Security Act (ERISA). Obtaining a QDRO can also be a lengthy process that may be best handled by a divorce attorney.