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Illinois divorce lawyersYou may have years, perhaps even decades until your retirement, but you are going through a divorce, the time to start thinking about your nest egg is now! Often one of the more valuable assets in a marital estate, retirement and pension accounts are the primary source of contention in approximately 60 percent of all high-conflict divorces. It is also one of the most complex assets to divide in divorce, and mistakes are both costly and exceedingly common. Learn how to avoid them, and discover what a seasoned divorce attorney can do to help.

Retirement Plan Types - Why It Matters

Not all retirement plans are the same, especially when it comes to dividing them in a divorce. Pension plans and 401K plans must be divided using a qualified domestic relations order (QDRO). This document, though based on the details of your divorce decree, is actually separate from your agreement, and it should be treated as such. It is a specialized legal area - and not all divorce attorneys have experience with them, so be diligent in your search for one. 

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DuPage County divorce attorneysDividing a retirement account during divorce is an exacting matter, with numerous pitfalls to avoid. Any failure to do so can result in a significant financial loss to one or both divorcing parties. Learn how to avoid the most common IRA division mistakes made during divorce, and discover how an experienced attorney can help with the process.

Dividing the IRA Before the Divorce is Final

IRAs, when disbursed, are considered taxable income by the Internal Revenue Service (IRS). Divorce does receive a special exclusion, so there are no penalties for either party. However, the split of an IRA account must be justified with a divorce decree. Without it, the division becomes subject to fees and penalties. That is not to say you cannot make an informal agreement with your spouse, or that you cannot discuss or determine how the account will be divided once the divorce has been finalized; such information can be sent to the courts for approval. Instead, it simply means that you cannot divide the IRA until you have a final decree.

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