{"id":551598,"date":"2026-06-26T01:24:16","date_gmt":"2026-06-26T01:24:16","guid":{"rendered":"http:\/\/www.montpelierjournal.com\/news\/story\/551598\/chicago-property-division-attorney-michael-ian-bender-discusses-retirement-accounts-and-pensions-in-illinois-divorces.html"},"modified":"2026-06-26T01:24:16","modified_gmt":"2026-06-26T01:24:16","slug":"chicago-property-division-attorney-michael-ian-bender-discusses-retirement-accounts-and-pensions-in-illinois-divorces","status":"publish","type":"post","link":"https:\/\/www.nevadanewsreporter.com\/news\/story\/551598\/chicago-property-division-attorney-michael-ian-bender-discusses-retirement-accounts-and-pensions-in-illinois-divorces.html","title":{"rendered":"Chicago Property Division Attorney Michael Ian Bender Discusses Retirement Accounts and Pensions in Illinois Divorces"},"content":{"rendered":"
\"Chicago<\/a><\/div>\n

CHICAGO, IL –<\/strong> Retirement accounts and pensions are often among the most valuable assets a couple owns, and how they are divided in a divorce can have lasting financial consequences. Chicago property division attorney Michael Ian Bender of Caesar & Bender, LLP (https:\/\/www.caesarbenderlaw.com\/blog\/retirement-accounts-pensions-divorce\/<\/a>) is providing guidance on how Illinois courts classify retirement assets, how different account types are divided, and the procedural orders required to complete the division.<\/p>\n

According to Chicago property division attorney Michael Ian Bender, any portion of a retirement account or pension earned during the marriage is generally marital property under the Illinois Marriage and Dissolution of Marriage Act, 750 ILCS 5\/503. This is true regardless of whose name is on the account or which spouse contributed the income. Pre-marital contributions, inherited accounts, and properly documented separate property may be protected, but the spouse claiming a non-marital interest carries the burden of tracing those funds back to their source. “Without clear documentation, including pre-marriage statements and contribution records, courts may treat the entire account as marital,” Bender explains.<\/p>\n

Chicago property division attorney Michael Ian Bender notes that Illinois follows equitable distribution, which means courts divide marital property fairly, but not necessarily equally. The IMDMA directs courts to consider several factors, including the length of the marriage, each spouse’s economic circumstances and earning capacity, age, health, employability, contributions to the marital estate including homemaking and childcare, any dissipation of marital assets, the value of non-marital property assigned to each spouse, and the tax consequences of the proposed division. Spouses can also negotiate their own division through a marital settlement agreement, which often gives both parties more control over the final outcome.<\/p>\n

Attorney Bender emphasizes that nearly every type of retirement account can be subject to division, and the method of division depends on the type of plan. Defined contribution plans such as 401(k)s and 403(b)s are valued at the current account balance, with the marital portion calculated based on contributions and growth during the marriage. Individual retirement accounts follow a different process; because IRAs are not governed by ERISA, they do not require a Qualified Domestic Relations Order. Instead, the transfer is made directly between custodians as a transfer incident to divorce under the Internal Revenue Code, which is generally not treated as a taxable event when properly documented.<\/p>\n

Defined benefit pensions are more difficult to evaluate because their value depends on future payments. Co-founding partner Molly E. Caesar adds that there are typically two approaches: a present value buyout, where a financial expert or actuary calculates the current worth of future payments and the non-employee spouse receives an equivalent lump sum or offset, and a deferred-distribution approach where the court retains jurisdiction to divide the payments when they begin. “Each method has advantages and risks that depend on the specific circumstances of the case,” Caesar notes.<\/p>\n

The firm points out that Illinois public employee pensions, including the Illinois Municipal Retirement Fund, the Teachers’ Retirement System of Illinois, and the Municipal Employees’ Annuity and Benefit Fund of Chicago, are not governed by federal ERISA rules. Each plan operates under its own state statute and requires a Qualified Illinois Domestic Relations Order, or QILDRO, rather than a standard QDRO. An order that satisfies one plan may be rejected by another, and some Illinois public plans require additional participant consent for members whose service began before July 1, 1999.<\/p>\n

Attorney Bender explains that a QDRO is a separate court order that directs the administrator of an employer-sponsored retirement plan to pay a portion of one spouse’s benefits to the other. It is required for plans governed by ERISA, including most 401(k)s, 403(b)s, and private employer pensions, and federal law sets the requirements for a valid QDRO under 26 U.S.C. § 414(p). A QDRO is distinct from the divorce judgment itself; even if a decree awards a share of a retirement account, the plan administrator will not divide the account without a properly drafted and approved QDRO. Many plan administrators require pre-approval of the proposed order before it is filed with the court to avoid rejections and delays.<\/p>\n

The Chicago firm notes that failing to obtain a QDRO can be a costly mistake. Without it, the plan administrator has no legal authority to divide the account, and the non-employee spouse generally has no enforceable right to receive that share. If the participant retires or dies before a QDRO is entered, enforcement issues can arise that affect the non-employee spouse’s rights depending on the plan terms and timing.<\/p>\n

Tax treatment is another area where mistakes can be expensive. For employer-sponsored plans, a valid QDRO allows the plan to pay the alternate payee, with payments generally taxable to the recipient unless rolled directly into an IRA or another eligible retirement plan. Qualified-plan distributions to a former spouse under a QDRO have a specific exception to the 10 percent additional tax. For IRAs, the transfer must be made as a direct trustee-to-trustee transfer incident to divorce under Internal Revenue Code § 408(d)(6) to avoid taxes; cash distributions instead may trigger income tax and, for spouses under age 59½, the 10 percent early withdrawal penalty. Caesar adds that comparing a pre-tax retirement account dollar-for-dollar with other assets without accounting for taxes can lead to an uneven division.<\/p>\n

The firm also reminds divorcing spouses to review and update beneficiary designations on every retirement account and any related survivor-benefit election after the divorce is finalized. For many ERISA-governed plans, the administrator generally follows the beneficiary designation and plan documents unless a valid QDRO or other controlling mechanism applies. Illinois has a separate automatic revocation rule for certain life insurance beneficiary designations after divorce, but federally preempted employer plans require special care.<\/p>\n

For those navigating retirement asset division in Illinois, addressing QDRO preparation, valuation, and tax planning early in the process may help avoid costly mistakes. Consulting with an experienced Chicago divorce attorney can help ensure that both the legal and financial aspects of dividing retirement assets are handled correctly.<\/p>\n

About Caesar & Bender, LLP: <\/strong><\/p>\n

Caesar & Bender, LLP is a Chicago-based family law firm focused on property division, retirement and pension division, QDRO preparation, and detailed asset divorce matters. Co-founding partners Michael Ian Bender, a former Cook County Domestic Relations Judge, and Molly E. Caesar, a Super Lawyers honoree and certified mediator, represent clients throughout Cook, DuPage, Lake, and Will Counties. For consultations, call (312) 236-1500.<\/p>\n

Embeds:<\/p>\n

Youtube Video: https:\/\/www.youtube.com\/watch?v=lSDt1HemJws<\/a><\/p>\n

GMB: https:\/\/www.google.com\/maps?cid=10482794179944044586<\/a><\/p>\n

Email and website<\/p>\n

Email: mbender@caesarbenderlaw.com<\/p>\n

Website: https:\/\/www.caesarbenderlaw.com\/<\/p>\n

Media Contact<\/span>
Company Name:<\/strong> Caesar & Bender, LLP<\/a>
Contact Person:<\/strong> Michael Ian Bender
Email:<\/strong> Send Email<\/a>
Phone:<\/strong> (312) 236-1500
Address:<\/strong>150 N Michigan Ave #2130
City:<\/strong> Chicago
State:<\/strong> IL 60601
Country:<\/strong> United States
Website:<\/strong> https:\/\/www.caesarbenderlaw.com\/<\/a><\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

CHICAGO, IL – Retirement accounts and pensions are often among the most valuable assets a couple owns, and how they are divided in a divorce can have lasting financial consequences.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/posts\/551598"}],"collection":[{"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/comments?post=551598"}],"version-history":[{"count":0,"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/posts\/551598\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/media?parent=551598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/categories?post=551598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nevadanewsreporter.com\/news\/wp-json\/wp\/v2\/tags?post=551598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}