What You Need to Know About Pensions During an Illinois Divorce
Divorce laws in Illinois help decide how assets and property split between the two spouses. A pension is considered one of those assets. Here’s everything you need to know about whether pensions are divided during an Illinois divorce.
In Illinois, pensions are treated like any other asset in a divorce. Whether in one person’s name or not, all retirement accounts are considered part of the overall assets in a divorce. If an individual established the account before the marriage, the portion outside the marriage are non-marital assets.
Illinois is an equitable distribution state, so the courts consider several factors when deciding what is deemed fair in splitting up the property from the marriage. The court divides assets equitably rather than equally. The courts will consider the income of both spouses, investments, property, education, living situation, and more.
One can pay out the value of a pension in two ways during an Illinois divorce. The value of pensions is not always completely known since it can involve factors involving future dates of retirement and investment growth. One way the state awards compensation for a pension is “immediate offset,” in which the court determines the present value of the pension. This method is often considered impractical by courts because valuation can be difficult and because there are often not enough other assets to compensate a spouse for its value.
The other method of dealing with a pension in a divorce in Illinois is “reserved jurisdiction.” In reserved jurisdiction, the court will reserve the right to divide the pension if and when it becomes payable in the future. This will allow the court to more accurately assess the pension amount that should be divided with the other spouse.