Tag Archives: retirement and divorce

Illinois divorce attorney, Illinois family law attorneyAs baby boomers settle into retirement, many are finding that a divorce has now become part of the plan. It is now estimated that “gray divorces” or those filing for a divorce after the age of 65, has tripled in number within the past few years. Aside from the challenges of any divorce, a gray divorce presents a new and often costly challenge, the division of marital property such as a pension, Individual Retirement Account (IRA) or a 401(k) plan and the fees associated with the Employee Retirement Income Security Act of 1974.

The division of one of these plans, the 401(k), a qualified profit-sharing plan offered to employees with individual salary-based contributions, usually matched by the host employer, has created a new legal reference now coined by divorce attorneys as a “silent fee."

As the couple’s wealth has increased over the years, the “silent fee” determines the cost of repositioning or division of funds, often leading to increased frustration during the division of property process.

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Illinois divorce attorney, Illinois marriage and divorce lawsDivorce at any age can be challenging but for the many seniors opting for divorce later in life, financial instability may climb to the top of the list. Grey divorce began trending as one of the most powerful generations, the baby boomers, are vacating their marriages at an alarming rate. It is reported that for every four divorces, one involves a couple 50 years or older. The trajectory for grey divorce estimates that Americans over the age of 50 are now twice as likely to divorce as their predecessors of 20 years ago.

Not only is this a trending topic, but one that involves new challenges, especially financial concerns. Unlike their counterparts who divorcing in their twenties or thirties and are discussing family law issues such as child custody, older couples face a different set of issues to contend with. Financial advisors urge those involved in a grey divorce to review retirement plans, real estate, business, and most importantly, debt.

Retirement Accounts: Division of Assets

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Hinsdale family law lawyers, protect my 401(k)Whether you realize it or not, your 401(k), IRA, pension plan, or other retirement plan in Illinois is a marital asset—an asset to be divided with your spouse in the event of an Illinois divorce. In other words, your spouse becomes a “not so silent partner” with you in your retirement plan if you are divorced in Illinois; your soon-to-be ex spouse can claim part of that account or plan and receive part of your retirement savings even though he or she never contributed to your plan.

What can you do about that?

First, stop contributing to your retirement account if you are seriously considering divorce or are going through a divorce in Illinois. Deposits to your retirement plan that you make, even while the case is pending, creates a growing marital asset. Stop the contributions if you can.

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