The Stogsdill Law Firm, P.C.
630-462-9500
After Hour New Client Telephone Number 630-690-6077 Our Location

Property division for 401(k) and retirement assets

Married couples sometimes build assets together as they attempt to reach a common goal of a comfortable retirement. When these couples divorce, they will face the property division process. This process includes splitting accounts like IRAs and 401(k)s. Illinois residents may not be aware of the correct process for dividing these accounts, but without the proper attention, some individuals could face penalties. 

For many couples, retirement funds make up the most significant portion of marital assets. These accounts have various rules and taxes associated with them. During a divorce, if certain procedures are followed, individuals may be able to avoid the tax penalties and fees of early withdrawal. 

For example, a workplace retirement plan like a 401(k) should be split using a Qualified Domestic Relations Order, or QRDO. This order is filed in accordance with the specifications of the divorce decree. Individuals should review the document and ensure that it is drafted correctly and the proper steps are followed. Other accounts like IRAs can be split by filing a copy of the divorce decree and other paperwork with the IRA custodian. Utilizing a trustee-to-trustee transfer method can help eliminate taxable events. 

Property division is an important part of the divorce process. The various types of retirement accounts all have their own rules. An individual will want to be sure that he or she is using the correct methods to transfer the funds or else he or she could face early withdrawal fees and income taxes. In Illinois, one method that people use to help themselves take the right steps during property division is to consult with an experienced family law attorney. 

Source: CNBC, "How to avoid mistakes dividing up 401(k) assets in divorce", Sarah O'Brien, March 7, 2018

No Comments

Leave a comment
Comment Information
Read More Testimonials
Contact Us Today

Contact Us To Schedule A Consultation With An Attorney At Our Firm Call 630-462-9500 or provide your contact information below and we will get in touch with you:

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

The Stogsdill Law Firm, P.C.
1776 S. Naperville Road - Building B, Suite 202
Wheaton, IL 60189

Phone: 630-690-6077
Phone: 630-462-9500
Wheaton Law Office Map

Review Us