Retirement Plans and Benefits
Retirement benefits are among the largest assets addressed during the divorce process. Our Illinois retirement plan attorney can help.
Many parties who contemplate divorce are surprised to learn that their retirement benefits comprise a large share of the couple’s joint assets. Retirement benefits—and the laws regulating them—are complex and intricate. If either party misunderstands or ignores this asset during the divorce process, they may later discover that more of the full retirement benefit could have been allocated in their favor. At Schiller DuCanto & Fleck LLP, one of our partners limits her practice to the discovery, analysis, and allocation of retirement and related benefits in a divorce. She also works with the preparation of Qualified Domestic Relations Orders ("QDROs"), Qualified Illinois Domestic Relations Orders ("QILDROs"), and other specialized court orders that allocate retirement benefits between divorcing parties. This in-house retirement benefit experience assures our clients that they will receive the maximum benefit possible from these valuable assets.
In Illinois, as well as in most other states, retirement benefits that are earned during the period of the marriage are considered to be marital property and may be allocated between the parties in a divorce proceeding. Thus, when parties are contemplating or working through a divorce, they must learn what retirement benefits have accrued to both parties and how those benefits may be factored into a settlement or litigation strategy.
The details that an Illinois retirement plan attorney will review regarding accrued retirement benefits include the following:
- What retirement benefits exist? Were the benefits earned because of employment? With what employer(s)? Over what period of time?
- Were contributions made to the retirement plan at issue? By whom? When? Will those contributions directly affect the value of the retirement benefit to be paid? How?
- When can benefits be paid? Now? At age 70½? At some earlier time? At some later time?
- How will benefits be paid? As a lump sum? In periodic installments over a certain time frame? As a monthly payment for the life of the employee? As monthly payments for the life of the employee and then, upon the employee’s death, as monthly payments for the life of the employee’s spouse? In some other form? In some combination of the above depending upon choices available to the employee?
- What is the value of the plan? How does the value fluctuate given the chosen form, timing and recipient of the benefit?
- What law regulates the retirement benefits at issue? Federal law? State law? Some combination? Which statutes? Which regulations?
- Does the regulatory law allow for the allocation of the retirement benefits from the retirement plan directly to a former spouse? If not, if the employer can but has chosen not to participate in direct allocations, or if special circumstances make the direct allocation law inapplicable, what are alternative methods for dividing these retirement benefits?
- If the plan will allow direct transfer of retirement benefits to a former spouse, what options may be elected by the former spouse? How can the timing and form of the benefit payment affect its value to the former spouse? To the employee?
- Do the retirement benefits in an individual situation have some component that may be considered non-marital property by the state court? If so, how will the court determine the marital portion?
- If current law permits the employer/retirement plan administrator to provide less than the full benefit available collectively to an employee and his or her former spouse, how can the client be certain to receive the full benefit payable under the retirement plan?
Divorcing spouses expect their divorce lawyers to know many areas of law in order to address all issues that may arise in each divorce case. Retirement benefit laws and QDRO preparation are intricate processes that require unique knowledge and skills. At Schiller DuCanto & Fleck LLP, we have a retirement plan attorney partner with 11 years of experience in this challenging blend of employee benefits and divorce consulting. She collaborates with all Schiller DuCanto & Fleck partners as well as with divorce attorneys outside the Chicago firm to ensure that these attorneys appropriately address all relevant issues regarding our clients’ retirement benefits.
Contact our retirement plan attorney in Illinois, and she will develop legal strategies to maximize benefit allocation, either through settlement or trial.