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Dividing 401(k) plans and pensions during a divorce

Illinois couples who decide to get a divorce later in life may find that their priorities are different than couples who are going through a divorce at a younger age. In many cases, the children have already grown up, meaning that former couples will not have to make decisions about child custody and child support. On the other hand, they’ll have to determine how retirement plans and other assets will be dealt with.

A gray divorce occurs between former couples who are 50 years or older. In many cases, those who decide to have a gray divorce are often on the cusp of retirement, meaning any mistakes could have a major impact on a person’s ability to afford housing, food and other daily expenses.

Before both 401(k) plans and pensions can be divided, former couples will need to get a qualified domestic relations order. This allows a person to get a one-time break from penalties when taking cash out as long as the reason for taking cash out is divorce-related. Furthermore, both individuals should check to ensure that there is no outstanding loan is in the process of being repaid. Splitting pensions can also be difficult as a professional is needed to determine how much that particular asset is worth.

When former couples have been together for years or even decades when they decide to get a divorce, property division can be particularly difficult. Even if the former couple is looking to amicably end their marriage, a family law attorney may assist with determining the value of certain assets, especially when it comes to financial assets. For example, the attorney might assist with determining which assets can be divided. This may also include determining who will keep the family home and other larger assets that cannot be divided.