One of the touchiest parts of going through a divorce in Illinois is figuring out how to split assets with one's spouse. This is because the decision made during a divorce regarding assets has a long-term impact on a person's financial situation long after the divorce has been finalized. Retirement assets, such as a 401(k) or a 403(b), can especially be challenging.
A 403(b) is similar to a 401(k) plan, except it is given to people who work in education or who work for non-profit organizations or for the government. Splitting these types of retirement accounts is not as simple as splitting a marital house is. A house can be transferred to a spouse as part of a divorce settlement, or it could simply be sold for the benefit of both parties. However, dividing a retirement account requires the filing of a document known as a QDRO, or qualified domestic relations order.
The QDRO has to be approved and then signed by a divorce court judge as well as the administrator of the retirement plan. This order features all details about the transfer of some or all of the funds in the account. If the order is not submitted in a timely manner, this may result in tax consequences as well as legal issues that may extend one's divorce settlement.
The process of splitting retirement assets and other marital property can be confusing and thus intimidating for a couple. However, proper legal guidance may help people going through divorce to understand their rights when it comes to handling these assets. Both parties in a divorce have the right to pursue their best interests when dealing with asset and property division in Illinois.
Source: newsmax.com, "Divorce and Your 403(b): What Are Your Rights?", Jerry Shaw, May 4, 2015