Whether you are starting your career, working toward a new goal or nearing retirement, your retirement savings is an important investment in your future. However, your divorce can have a major impact on that investment.
Your savings may be included in your marital property.
Illinois regards most property acquired during your marriage—including pension benefits—as marital property. These jointly owned assets will be divided in a way that the court finds equitable or fair during your divorce. The courts will generally view property that you owned before your wedding as your individual property.
Because you have probably built your retirement savings throughout your marriage, the court will likely consider that savings marital property unless you have a prenuptial agreement in place. Moreover, your divorce could impact your IRA, pension or social security benefits as well.
Splitting your savings in half may not be the only option.
For some couples, the only fair solution may be splitting their retirement savings in half. This can be a simple solution, especially if you and your spouse have significantly different incomes or if one of you has taken time away from your career to raise your children.
Halving your retirement savings is not the only way to create an equitable solution, however. If you and your spouse have similar amounts in your individual retirement accounts, it may make sense for each of you to keep your own savings. In other cases, you may be able to give up other valuable marital property like your family home in exchange for keeping a valuable retirement account.
When you are concerned about how your divorce will impact your retirement savings, speak to an attorney to build a legal strategy based on the assets that matter most to you.