If you’re going through a divorce in Illinois and you have retirement benefits, your former spouse may try to get a share of this income. It’s a good idea to learn what happens to retirement benefits while going through a divorce.
How retirement benefits get divided in Illinois
In Illinois, retirement benefits get divided based on how much you earned after getting married. To divide these plans, you’ll usually need a qualified domestic relations order. A qualified domestic relations order is an important document that provides details about the plan to compensate your former spouse. Once your retirement date arrives, you and your ex-spouse would each receive the money you’re both entitled to.
Dividing other types of retirement plans
Sometimes, people going through divorce are dividing retirement accounts created under the Illinois Pension Code. The state provides these plans to police officers, firefighters, teachers and other state employees. To follow through with dividing benefits into these plans, the court would require a specialized version of a qualified Illinois domestic relations order.
Can your ex-spouse cash out their shares before you retire?
Yes, if your retirement plan allows it, your ex-spouse could pull out the benefits they’re entitled to. However, they’ll also likely need to pay early withdrawal penalties. These penalties can get waived if the terms of your qualified domestic relations order allow for this to happen. With that said, your former spouse will still need to pay taxes on any early withdrawals from a retirement account.
It’s understandable to get confused about how to handle retirement benefits while getting divorced. To help ensure that your retirement benefits aren’t handled unfairly, it’s beneficial to consider working with a divorce attorney.
