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QDRO and Your Divorce

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There has been a recent uptick in grey divorce, divorce over the age of 50, over the past few years. When couples in this age group get divorced, they often are concerned about the impact divorce can have on their retirement funds. Since retirement funds can be deemed marital property, they are subject to division during divorce. So how can you avoid unnecessary losses?

The Risk to Your Retirement Assets

When money is taken out of the account by the holders before they reach the age of 59 and 6 months, early withdrawal taxes may apply. These taxes can swallow up to 10% of the amount withdrawn.

How To Avoid This

If one spouse is ordered to receive a portion of the other spouse’s 401(k) or 403(b) account during division of property, the use of QDRO (Qualified Domestic Relations Order) can help you avoid the early withdrawal taxes. QDRO states all the provisions of the transfer of funds and prevents the transfer of funds from being classified as an early withdrawal. However, if QDRO is not filed and you take money from a retirement account and give it to the other spouse, that money is taxable.

Please keep in mind that all requirements of QDRO must be followed in full. Failure to follow them can result in your funds being taxable, thus costing you your hard-earned money.

Make Sure Your Accounts Are Protected

You worked hard to build up your retirement funds, so you need to make sure that they are protected. It is best to consult an experienced Illinois divorce lawyer to avoid the risk of losing these valuable assets. Talk to one of our attorneys today so we can work with you on getting the fair settlement your deserve in your divorce.

Client Testimonials

Here's what our clients have to say about working with us. Please note, results may vary based on individual circumstances.

Melinda Previtera, Esq. came highly recommended to our family. Her knowledge base, professionalism, and compassion paved the way for a successful outcome. Melinda is efficient, detailed, and informative. She helps manage expectations, and postures her client for a fair and equitable result. We are happy to recommend Melinda!

Jennifer A.

My experience was very good. Everyone was professional and attentive to my needs, keeping me updated every step of the way. I couldn’t ask for a better result, highly recommended.

David R.

My marriage life has been a hell for me for the past four years until I decided to put an end to what has to be ended. Choosing a lawyer was another additional stressful part of the long process. I’m so glad that I’ve found the right one for me at Petrelli Previtera. Life isn’t always fair, but at least having her in my corner, felt even better. I couldn’t recommend her highly enough!

Caitlin B.

Serving Clients at the Following Locations

ChicagoTwo Prudential Plaza 180 North Stetson Suite 3500 Chicago, IL 60601(312) 252-2085view details
Schaumburg1750 E. Golf Rd, Suite 382 Schaumburg, IL 60173(630) 491-9670view details
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