You may have been saving up your entire career, and just as you are headed for retirement, your spouse decides it’s time for a divorce. As you consider how the marital assets will be divided, you may worry about what’s going to happen to your pension and other retirement accounts.
Illinois is an “equitable distribution” state, which means the court will divide your marriage’s assets fairly, rather than just an even 50/50 split. If you don’t have a prenuptial or postnuptial agreement to specify which assets (including retirement accounts) belong to you alone, the court can divide these assets between you in the divorce. This includes any pensions and retirement savings accounts, like 401(k)s and IRAs, as well as the marital property and the family home.
Your Social Security may also be impacted. For divorcees whose marriages lasted at least 10 years, your ex-spouse may still qualify to receive up to half of your Social Security benefits (even if you remarry) if all of the following are true in their situation:
- They’re not married
- They’re 62 or older
- You are eligible for Social Security retirement or disability
- The benefits they’re entitled to based on their own employment history are less than the amount they would get from sharing your benefits
When a judge decides how to divide retirement accounts like your 401(k), they must first determine whether that money is marital property (an asset accumulated during the marriage). If it is, the judge will then choose how much of the money in the account should be split, keeping in mind a sense of fairness. The judge may consider the income and earning ability of each of you, the amount of assets and the length of your marriage.
Instead of a judge deciding to split your marital assets, you can negotiate a settlement agreement and choose how best to divide your marital property. When you’re facing the complexities of divorce and retirement, it’s far from easy.
An experienced Illinois attorney can help you whether to negotiate amicably or fight it out in court.