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Wheaton Pension Division in Divorce Lawyer

Attorney Assisting With Dividing Investments and Retirement Funds in DuPage County

Warrenville Property Division Attorney

When a couple dissolves their marriage through divorce, there are a large number of issues that must be settled, and one of the most important aspects of this settlement is the division of marital property. This division can become especially complicated when property extends beyond physical possessions and into the realm of finances.

Married couples spend much of their adult life planning for the future through financial investments and retirement accounts, and depending on their job, one or both spouses may also be eligible for a pension when they retire. While these investments may be in one spouse's name, contributions toward these investments made during the marriage are considered marital property, making them subject to equitable distribution during divorce.

Valuation of Financial Investments

Determining how to assess the value of investments, retirement funds, and pensions and divide this value between divorcing spouses can be a complicated manner. During divorce, spouses may need to use experts like accountants, divorce financial planners or financial appraisers to get a clear picture of what they own and how it should be divided.

Retirement investments generally fall into one of two categories:

  • Defined Contribution Plans - One or both spouses may have saved money in 401(k) or IRA accounts to be made available after they retire. As the institutions which operate these accounts invest money, account balances may change from day to day, but owners can look up their current balance at any given time in order to determine the value to be divided during divorce.
  • Defined Benefit Plans - Pension funds do not have a defined value, since they provide an amount to be paid regularly to an employee upon retirement based on a variety of factors, including how many years the employee worked and the salary they earned close to retirement. This can make determining the value of pensions difficult, and the assistance of a pension valuator is often required.

Equitable Division of Investments

When dividing the value of retirement accounts, each type of investment requires a different approach. Defined contribution plans may be split equally between spouses, or spouses may agree to other arrangements, such as one spouse retaining sole ownership of a 401(k) account while the other spouse is granted more of the equity in the marital home.

Determining how to equitably divide defined benefit plans can be more complex, requiring the calculation of the marital portion of future pension payments. This marital portion can be determined by looking at how long the spouse worked for the employer during the marriage as a percentage of the total time worked for the employer. For example, if one spouse worked for their employer and contributed to a pension fund for a total of 30 years, and the couple was married for 15 of those years, the marital portion of the pension payments that the spouse will begin receiving after retirement is 50%, and the other spouse will be able to receive half of that marital portion.

Retirement accounts or pensions will be distributed between spouses using a Qualified Domestic Relations Order (QDRO). This type of order allows for the withdrawal of funds from investment accounts without incurring any penalties or taxes.

Contact a Naperville Divorce Attorney

Understanding the complex nature of investments and retirement plans during divorce can be a daunting task, but it is essential for being able to secure your future financial stability. The skilled divorce lawyers of Anderson and Associates, P.C. understand the nuances of the law, and we can help you reach a fair and equitable settlement. Contact a Wheaton Divorce attorney at 630-653-9400 to schedule an initial consultation.

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