Securing your financial future by helping you save for retirement is something your employer may offer you as an employee. In addition, you may have saved on your own to build a healthy nest egg for your golden years. While money deposited in retirement accounts generally belongs to the person whose name is on the account, when that person gets divorced, if there are no agreements to the contrary, his or her spouse is entitled to an equitable portion of the money contributed into the retirement accounts during the marriage.
Retirement Funds as Marital Property
In Illinois, despite in whose name the account is held, retirement benefits, including pensions and 401k savings accounts, are considered marital property if they are acquired after the marriage was formalized and before a formal dissolution of a marriage is granted by a judge. If either spouse wants to challenge the classification of the retirement benefits as marital property, he or she has to show the court that the benefits were acquired in a way that qualifies as non-marital property under the law.
When a couple is getting divorced, each spouse can request an equitable portion of the other's retirement benefits be awarded by the court. However, Section 502 of the Illinois Marriage and Dissolution of Marriage Act provides that the couple could also agree on how to deal with the retirement benefits themselves. For example, they can decide to renounce all claims to the benefits, or, if they both have retirements funds, they can agree to an even split of the accounts. These agreements could be written into a marital settlement agreement, which is then reviewed by a judge before being entered as part of the final Judgment for Dissolution of Marriage.