How Are Pensions Addressed in an Illinois Divorce?
One of the most consequential factors in any divorce case is the division of marital assets and debts. Dividing the funds in a checking account or deciding which spouse will keep the furniture may be accomplished with relatively little complication. However, complex assets like pensions and other retirement accounts are much harder to deal with during a divorce. One reason pensions are especially hard to divide is that the final value of the pension is often unknown at the time of divorce. If you or your spouse have a pension, a skilled divorce lawyer can help you decide how to divide this important asset.
Determining Property Rights in an Illinois Divorce
Illinois law divides property into two categories in a divorce. Marital assets are those assets that were accumulated during the marriage by either spouse. Non-marital property is property that was obtained by a spouse before the marriage. Both spouses have a right to a fair share of the marital property.
Some assets are partially marital and partially non-marital. The retirement funds that were earned before the parties wed is usually separate property. The retirement funds that a spouse accumulated during the marriage may be marital property and therefore subject to division.
Valuing Pensions Can Be Complex
Before pensions can be addressed during divorce, the funds must be accurately valued. There are three main ways to value pensions in a divorce case:
- Life Expectancy – The present value of a pension may be determined through the life expectancy approach. This valuation method uses the pension holder’s life expectancy to determine the pension benefits he or she will most likely receive in the future.
- Group Annuity Mortality Tables - This valuation approach uses the interest rate for a 30-year U.S. Treasury Bond and Group Annuity Mortality Tables to determine the present value of the pension.
- PBGC Actuarial and Mortality Tables- The pension’s value may also be determined using information from the Pension Benefit Guaranty Corporation (PBGC).
Legal Assistance for Property Division Concerns
Valuing and dividing pensions in a divorce is often complicated and stressful. An experienced divorce lawyer can help you determine the best way to handle the situation. In some cases, it is best for the pension holder to retain the pension funds and the other spouse to receive property of equivalent value. In other cases, it makes sense to divide the pension funds between the parties.
Contact a Palatine Divorce Lawyer for Help
If you are getting divorced, contact Arlington Heights divorce attorney Nicholas W. Richardson for help. Call 847.873.6741 for a free, confidential case assessment today.