Property Division: Pension Assets

Legal Help Dividing Retirement Assets in Divorce

Helping High Asset Couples with Pension, 401K, and Annuity Division

During the resolution of a divorce, pensions, annuities and stock portfolios will need to be valued and divided. Pension, money market, mutual fund, and stock assets will be valued as of dated of divorce. 401Ks and annuities are readily available for reinvestment or cashing in (with tax consequences) once the divorce is finalized.

However, some retirement assets will not be immediately available for cash or transfer. Traditional pensions are now few and far between, but some couples or union workers may still have such assets. A traditional pension cannot be distributed until the person who earned the pension reaches pay status. In order to get a proper valuation for dividing this retirement asset, it may be necessary to hire an actuary or accountant.

Understanding Complex Pension Assets

For high-net-worth couples with complex estates, the first step in arriving at a fair and equitable division of retirement assets is to gain a complete understanding of the assets involved. At the Law Offices of Jennifer C. Smetters clients can work with CPAs, accountants, and other financial professionals to arrive at a settlement agreement through negotiations or in court.

Learn more about the complexities of dividing retirement assets in divorce. Contact attorney Jennifer Smetters to schedule a complimentary initial consultation.

Pension Funds as Marital Assets

Although only one party earned the retirement asset, if it was earned during the course of a marriage it is marital property and a claim can be made against it. If the spouse who earned the retirement asset, such as a 401K, chose to remove those funds with the mistaken impression that they would then not be available as a marital asset, he or she is mistaken.

If one spouse dissipated assets against a 401K, removal of those funds will be investigated and credited back to the spouse who did not spend or remove the assets. The entire investment portfolio may be reviewed by an independent investment manager to determine the extent of financial losses.

Properly Dividing Retirement Assets

Once the divorce is finalized and the judgment of dissolution has been entered by the court, a QDRO (qualified domestic relation order) will be entered by the court and sent to the plan administrator or account manager, who will facilitate the distribution of funds awarded in the property settlement.

A 401K can be transferred immediately once a QDRO is finalized. For clients who need help setting up an investment account or understanding their choices in terms of fund rollovers, Ms. Smetters can assist you in accessing an investment account manager.

Ms. Smetters is a strong legal advocate protecting your rights and interests in divorce. Contact her Chicago family law office or call 312-360-1166.