What Happens with Divorce and Pension Plans?

Many people are concerned about divorce and pension plans and what will happen to those plans and any other retirement accounts upon finalization of a divorce. People seem to think that if the pension plan is solely in their name (which it typically is), then their pension is theirs alone and they do not have to share it with their spouse when they divorce.

Pension Plans are a Marital Property Subject to Division in Divorce

The classification and reimbursement principles in 750 ILCS 5/503(a) and 5/503(c) apply to retirement plans and pensions and divorce in Illinois. A pension that is established before the marriage, as well as its increases in value, remains nonmarital property; however, the marital estate may be entitled to reimbursement for marital contributions or for the significant personal efforts of a spouse that result in substantial appreciation. When evaluating divorce and pension plans, the courts have noted that an interest in a pension plan is marital property if a portion accrues during the marriage.

Separating Pension Plans and 401(k)s in an Illinois Divorce

Instead, the trial court’s finding that any income in the wife’s 401(k) earned during the marriage should be divided, half to each side as a matter of course and without considering the statutory factors, was an abuse of discretion. The appellate court remanded the case, instructing the trial court to consider the statutory factors in order to divide the wife’s 401(k) in just proportions. Equitable division of retirement assets, as with all other assets of the parties, requires consideration of the factors in §503(d) of the Act regarding pensions and divorce in Illinois.

Divorce and Pensions Plans, Retirement Accounts and Deferred Compensation

Contact Anderson and Boback for answers to these and all questions related to retirement accounts, 401(k) plans and pension rights after divorce. We are experienced in all family law matters and highly respected divorce attorneys with an understanding of Illinois divorce and pension plans.

THIS ARTICLE WAS PREVIOUSLY PUBLISHED AT: https://illinoislawforyou.com/property-division/what-happens-with-divorce-and-pension-plans/

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