LAW OFFICE OF
 JOSEPH J. WALCZAK, P.C.

708.361.3390
FREE CONSULTATION
Law Office of
JOSEPH J. WALCZAK, P.C.

708.361.3390
FREE CONSULTATION
 PENSION, 401k, RETIREMENT RIGHTS & BENEFITS IN DIVORCE

MY HUSBAND HAS A UNION PENSION AND 401k. HE SAID THAT I WILL NOT GET ANY OF HIS PENSION AND 401k BECAUSE IT IS CONTROLLED BY THE UNION AND HE EARNED THESE RETIREMENT BENEFITS BY WORKING SO I AM NOT ENTITLED TO THEM.  IS IT TRUE THAT I DO NOT GET ANY OF HIS RETIREMENT BENEFITS?

No. Your spouse does not know the law or is trying to keep you from your rights to his retirement benefits. Retirement benefits earned during the marriage are considered marital property subject to equitable division by the court.

PENSION BENEFITS:
Pension benefits are generally considered marital property regardless of whether the pension is matured, vested, nonvested, contributory or noncontributory. As long as the pension was earned by the employee spouse while married, it is considered acquired by the employee spouse and is marital property.  In determining the marital portion of pension benefits, most trial courts and lawyers in Illinois follow the Hunt formula set forth in In Re Marriage of Hunt, 78 Ill.App.3d 653 (1st Dist. 1979).   The Hunt formula basically provides that the marital portion of the pension is determined by the number of years and months of pension benefits earned during the marriage.  For example, if the parties were married 15 years, and the employee spouse had a pension in place for twenty years, the marital portion of the pension would be the 15 years of pension earned during the marriage.  That portion of the pension would be subject to equitable division, and the 5 years earned prior to the marriage would be retained by the employee spouse.  In a typical case, the non-employee spouse would be entitled to receive 1/2 of the value of the pension earned during the marriage.  In our example, the non-marital spouse should be entitled to 1/2 of 15 years of pension.  If all of the pension was earned while the parties were married, the non-employee spouse would be entitled to 1/2 of the 20 years of pension benefits.  Of course, the court can award one spouse more or less than than 50% of the marital portion of the pension under appropriate circumstances, but appropriate circumstances must be present to deviate from a 50/50 award, such as one spouse has assets which are so substantial that he or she can provide for his or her retirement without 50% of the pension benefits. 

PROFIT SHARING:   Profit sharing earned during the marriage is marital property and subject ot equitable division under the Hunt formula discussed above.

401k BENEFITS:  401k benefits earned during the marriage are marital property and subject to the Hunt formula discussed above.  It is not uncommon for the spouse who has control over the 401k benefits to take loans to pay bills or to reduce the value of the 401k so the non-employee's spouse's share is reduced.  Any withdraws or loans against the 401k must be used for a marital purpose or they are subject to a Dissipation of Assets claim by the non-employee spouse.  Even if the employee spouse uses the funds for a marital purpose, if the withdraw or loan from the 401k were not strictly necessary due to lack of income, the employee spouse will likely be required to compensate the non-employee spouse for the reduction in value of the non-employee's spouse's interest in the 401k.  If a non-employee spouse is concerned about the employee spouse dissipating a 401k, the non-employee spouse can seek emergency relief from the court to enjoin the employee spouse from accessing the 401k.

OTHER RETIREMENT BENEFITS:  Most retirement benefits earned during the marriage, regardless of whether they are matured, vested, nonvested, contributory or noncontributory, are marital property subject to equitable division between the parties by the court.  If you are not offered 1/2 of your spouse's retirement benefits earned during the marriage, make sure there is a sound reason for your not receiving your share of your spouse's retirement interest.


        
Illinois family law attorney and estate planning attorney Joseph J. Walczak represents clients in Cook County and Will County and DuPage County, including downtown Chicago, and the Chicago suburbs of Palos Heights, Orland Park. Tinley Park, Bridgeview, Palos Park, Palos Hills, Worth, Alsip, Frankfort, New Lenox, Lemont, Homer Glen and other Chicago suburbs.

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