Pensions are often one of the biggest assets in an Illinois divorce. Unlike cash or property, pensions cannot simply be split at the time of divorce. Instead, Illinois law provides several ways to divide a pension, most commonly through a Qualified Domestic Relations Order (QDRO), but also through present value or reserved jurisdiction approaches. Choosing the right option can significantly affect your financial future. A pension is “a regular series of payments made to a person (or the person’s representatives or beneficiaries) for past services” Black’s Law Dictionary (11th ed. 2019) Pensions make sense. While you worked you got a paycheck and lived off that paycheck. After you retire, you get a pension check to maintain yourself. The pension lasts as long as your life, thereby fulfilling your needs without guessing at how much you need to save. Pensions cannot be cashed out at the moment of a divorce because the future pensioner doesn’t have the right to the pension until the stated retirement date. How is a pension’s future stream of income divided in an Illinois divorce? Can Pensions Be Divided In An Illinois Divorce? Pensions can be divided in an Illinois divorce. Pensions are considered marital property if earned during the marriage. Illinois courts typically use a Qualified Domestic Relations Order (QDRO), but other methods such as the present value and reserved jurisdiction approaches may also apply. If any of the pension is earned during the marriage, the pension will be deemed marital property.“For purposes of distribution of property pursuant to this Section, all pension benefits (including pension benefits under the Illinois Pension Code, defined benefit plans, defined contribution plans and accounts, individual retirement accounts, and non-qualified plans) acquired by or participated in by either spouse after the marriage and before a judgment of dissolution of marriage or legal separation or declaration of invalidity of the marriage are presumed to be marital property.” 750 ILCS 5/503(b)(2) An Illinois divorce court “shall divide the marital property without regard to marital misconduct in just proportions.” 750 ILCS 5/503(d) “A spouse may overcome the presumption that these pension benefits are marital property by showing through clear and convincing evidence that the pension benefits were acquired by a method listed in subsection (a) of this Section.” 750 ILCS 5/503(b)(2) While pensions are marital and, thus, divisible, retirement plans are acknowledged to have a non-marital portion when partly earned before the marriage. “[P]roperty acquired […]
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