Report Addresses Divorce and Retirement Benefits
By: Gordon & Perlut, LLC
If you are going through a divorce, plan to file for divorce in the near future, or if you have recently finalized your divorce, you should know you may be entitled to some of your spouse’s retirement benefits.
While this point might seem obvious for some married couples, many spouses who go through divorces in the U.S. do not take advantage of their legal ability to obtain retirement benefits from their spouse. As a result, spouses who do not have retirement benefits could end up struggling in their later years after a Chicago area divorce.
A retirement security report issued by the U.S. Government Accountability Office (GAO) in July 2020 emphasized the U.S. Department of Labor (DOL) “could better inform divorcing parties about dividing savings.” We want to discuss the report and its implications for anyone who is planning on divorce in Chicago.
Many Divorce but Few Receive Retirement Benefits
According to the GAO report, “although more than one-third of adults aged 50 or older have experienced divorce, few people seek and obtain a Qualified Domestic Relations Order (QDRO)” in order to obtain retirement benefits from the other spouse. Depending upon the type of retirement plan a person has, a QDRO can allow one party to obtain retirement assets from the other party’s account (without paying the usual 10 percent penalty).
First, many people simply do not seek retirement benefits from their spouse in a divorce case because the prospect of seeking a QDRO seems too complicated and often too expensive. Second, for those who seek a QDRO in order to obtain certain types of retirement benefits, their claims are denied. The report indicates that approximately one-third (1/3) of the parties who did seek retirement benefits from pensions through a QDRO after filing for divorce lost their claims to those benefits.
Having an Attorney on Your Side Makes a Big Difference
Why are so few people not obtaining retirement benefits? In short, many people who are seeking retirement benefits or who seek QDROs and lose their claims do not have assistance from an experienced attorney. The report underscores that people with lower incomes, as well as people who simply elect not to hire an attorney, “face challenges successfully navigating the process for obtaining a QDRO, including complexity and cost.”
The findings in the report highlight the need to raise awareness about retirement benefits and access in a divorce, and ultimately the need to have a lawyer on your side who can ensure you receive the benefits to which you are entitled.
Contact a Chicago Area Divorce Attorney
Determining your rights both during and after a divorce can be complicated It is critical to have an experienced Chicago area divorce lawyer on your side throughout your case. If you have any questions about benefits to which you may be entitled, or your options for obtaining retirement funds through your spouse’s employment, you should speak with one of the family law attorneys at our firm. Contact Gordon & Perlut, LLC today for more information about benefits and divorce in Illinois.