DuPage County Retirement Benefits Division Lawyer

Attorney Assisting With QDROs, QILDROs, and COAPs in Wheaton, Glen Ellyn, and Glendale Heights

During divorce, the process of dividing marital property can sometimes be complicated, especially when a couple owns complex assets. Along with the physical property a couple owns, their marital home, business interests, and financial investments, they will need to determine how to divide pensions and other retirement savings or benefits. Dividing these assets can involve creating certain types of court orders, and it is important to work with an attorney who understands how to create and execute these legal documents correctly.

At McSwain Nagle Giese & Rapp, P.C., our lawyers have more than 100 years of combined experience working in the field of family law. We can ensure that you have properly considered the legal and financial issues involved in the property division process, and we will help you make the right decisions to protect your rights and your financial interests. We will work with you to create the necessary documents to address retirement benefits, ensuring that you will have the financial resources you need once your divorce is complete.

Dividing Retirement Benefits Through Court Orders

As with other types of marital property, money saved in retirement accounts or pension benefits earned during a couple's marriage must be divided equitably between the spouses. However, withdrawing funds from retirement accounts before reaching retirement age may result in taxes and penalties, and an ex-spouse will want to be sure they receive the proper portion of their former partner's pension benefits. To address these issues, the following types of court orders should be created during the divorce process:

• Qualified Domestic Relations Order (QDRO) - This type of court order can be used to withdraw funds from 401(k)s or other types of defined contribution retirement plans and transfer them to an ex-spouse. While a 10% penalty usually applies if funds are withdrawn before reaching the age of 59 1/2, a QDRO will provide an exemption to this penalty. Following the withdrawal, the ex-spouse may roll the funds over into their own retirement account. They could also use the funds in other ways, such as depositing them into a savings account or using them to make a down payment on a home, but in these cases, they will be required to pay income taxes. A QDRO may also be used to divide certain types of pension benefits.
• Qualified Illinois Domestic Relations Order (QILDRO) - If a spouse is an employee who works for the state of Illinois and is eligible to receive pension benefits through the State Employee Retirement System (SERS), this type of court order must be used to specify that a portion of the pension benefits will be paid to their ex-spouse. An ex-spouse may receive a specific dollar amount or percentage of an employee's monthly pension benefits, termination refund or lump-sum retirement benefits, partial refund, and/or death benefits. A QILDRO may also state whether an ex-spouse will receive benefits for a certain period of time or until the death of either party, and it can specify whether the ex-spouse's benefits will be increased or recalculated on an annual basis.
• Court Order Acceptable for Processing (COAP) - Because retirement benefits available to employees of the federal government are typically not covered under the Employee Retirement Income Security Act (ERISA), specific types of court orders must be used to divide these benefits between divorcing spouses. Employees who are eligible for benefits under the Federal Employees Retirement System (FERS), Civil Service Retirement System (CSRS), or Thrift Savings Plan (TSP), as well as those who can receive military retirement benefits, should use a COAP to specify the amount or percentage of these benefits that should be paid to an ex-spouse. A COAP can be used to divide employee annuities, former spouse survivor annuities, and refunds of employee contributions.

Contact a Naperville Retirement Asset Division Lawyer

When dividing retirement savings or benefits during divorce, you need to work with an attorney who is experienced in addressing these matters and creating QDROs, QILDROs, and COAPs. To learn more about how our firm can help you complete your divorce successfully, contact McSwain Nagle Giese & Rapp, P.C. at 630-407-1200 to arrange a complimentary consultation. We serve clients in Warrenville, Wheaton, Winfield, Glendale Heights, Glen Ellyn, Carol Stream, Naperville, and throughout DuPage, Will, Kane, Kendall, and Cook Counties.