What Happens to My Retirement Account During an Illinois Divorce?

 Posted on May 22, 2025 in Asset Division

Part of the divorce process is the necessary division of property. When a retirement account is characterized as marital property, it will be divided according to Illinois law. Sometimes, the process is complicated, requiring more financial knowledge and possibly resulting in tax implications. A Wheaton, IL asset division attorney will ensure you understand your legal options for dividing your retirement accounts and make choices with as few negative consequences as possible.

When Is a Retirement Account Considered Marital Property in Illinois?

Illinois law defines marital property as assets, debts, and other obligations obtained by either spouse during the marriage. In general, contributions made to a retirement account during a marriage are subject to division. 

If one spouse started an account before getting married and continued to contribute to the account during the marriage, part of the balance may be non-marital property, meaning that the owner spouse could keep that portion.

How Are Retirement Accounts Split in an Illinois Divorce?

Once a retirement account or portion of a retirement account is deemed marital property, it has to be divided equitably. There are three orders with differing uses that a judge may implement to divide a retirement account:

• Qualified Domestic Relations Order (QDRO): This order describes how a retirement plan administrator should issue retirement benefits to a non-owner spouse.

• Qualified Illinois Domestic Relations Order (QILDRO): If you are an Illinois government employee, a judge may use this type to divide retirement accounts or pension benefits.

• Military Retired Benefit Division Order: A judge may use this order to divide pensions and thrift savings plans for military members and veterans.

The most common type is the QDRO. A benefit of using the QDRO is that it waives the 10 percent penalty you would normally incur for withdrawing from a 401(k) early if you decide to roll the funds over into a separate account. 

How Is the Value of a Retirement Account Calculated for Divorce?

One of the most complex parts of the property division process is calculating the value of assets like retirement accounts. For example, because retirement accounts increase in value over time, the future value may be considered as well. However, it is not as simple as it sounds. There are different types of retirement accounts. For some, the present value is more relevant, and for others, considering the future potential value makes the most sense. An experienced attorney will assess the specifics of your divorce to determine the best process for you.

Can You Keep a Retirement Account During Divorce in Illinois?

During negotiations, with the help of a knowledgeable legal representative, you may be able to protect your retirement account by offering other assets. For example, you can offer another account or piece of property of equal value in exchange for your spouse’s portion of the retirement account. If you addressed retirement accounts in a valid prenuptial agreement, the court will likely uphold that plan.

Contact a Wheaton, IL Property Division Attorney Today

Sometimes, the seemingly obvious way to divide a retirement account is not the best legal option. A DuPage County, IL divorce lawyer can help you protect your investments and minimize the risks associated with complex property division. At Andrew Cores Family Law Group, we understand that dividing assets is a sensitive subject, especially when dealing with money someone saved for the future. We take a client-focused approach, protecting your rights and negotiating for the best possible outcome. Call 630-871-1002 to schedule your free consultation today.