During divorce in Illinois, marital property is split equitably but not always equally. That means that assets like homes, vehicles, bank accounts and investments are split between the spouses in a fashion a court considers equitable.

Pensions are difficult to split and require some additional maneuvering.

The first rule of pensions in a divorce

The first rule of how to split up a pension in a divorce is to determine how much of the pension is “marital property” and how much is not.

Each person brings property – such as a pension – into the marriage. In a divorce, the property brought in to the marriage stays with that spouse while the property gathered during the marriage is marital property and can be split between the spouses.

In the case of a pension, the court will first determine how much was brought in to the marriage. Then the court will determine how much accrued during the marriage. This can be difficult because the true value of a pension isn’t always known until the date of retirement, and different pensions have different valuation methods. However, the pension administrator can give an estimate during divorce proceedings as to the potential value of the pension.

Qualifying offers

If either spouse chooses to take a lump-sum payout from the pension before retirement, that money is subject to taxes and fees. Also, some pensions forbid money to be removed before retirement.

In these cases, one spouse may offer the other spouse another valuable asset in lieu of the pension.

If that’s not an option, then a judge can issue a qualifying domestic relations order (QDRO) that orders the pension administrator to make specific payments from one spouse’s pension plan to the ex-spouse upon the pensioner’s retirement.

If the pension is governed by the Illinois Pension Code – including plans for state employees, teachers, firefighters and police – a judge will issue a qualifying Illinois domestic relations order (QIDRO). This order is similar to a QDRO with some limitations, including survivor benefits.

Divorce is a difficult business and divvying up a pension – accrued from a lifetime of work – can be very difficult. An experienced, qualified attorney can make sure you get the best treatment possible in your divorce.