Kane County Pension Valuation Attorneys

Experienced Pension Valuations and QDRO Lawyers Serving St. Charles, IL

Retirement assets often account for a significant portion of a marital estate and dividing those assets in a divorce can be complicated. Illinois is an equitable distribution state, so marital assets do not have to be divided equally. Rather the law seeks a fair distribution with consideration of numerous factors. To divide retirement assets like pensions and 401(k)s fairly, each asset must be accurately valued. Additionally, specific procedures for transferring funds from one account to another must be followed to avoid significant tax penalties. At Shaw Sanders, P.C., our attorneys are experienced in working with complex retirement assets as part of the property division process.

Valuing Pension Assets for Division

Pensions, also known as defined benefit plans, are difficult to value because the valuation is based on the future payout of the plan. An experienced actuary must determine the present value of the pension. There are three methods used to make this valuation, which include:

• Life Expectancy Method
• PBGC Actuarial and Mortality Tables Method
• GATT Method

The methods differ in which tables they use to project the lifespan of the policyholder and which discount rates are used in the calculations. The value of a pension plan may be contested in a divorce if each party has the pension appraised and the conclusions are inconsistent. Our attorneys work closely with experienced actuaries and appraisers who are highly skilled at valuing pensions and testifying effectively in court to support and defend their work.

Dividing Pensions and Drafting QDROs

Dividing a retirement account is not as simple as simply transferring the money from one account to another. Many retirement accounts come with early withdrawal penalties of 10 percent, which can translate to thousands of dollars lost. As such, there are special methods that the court can employ to carefully divide retirement assets. Upon determining the value of a pension, the next step is to determine how it will be divided in the divorce. In general, there are two options to choose from. They are:

• Immediate Offset Method – The pension remains in the name of the employee, and the other spouse receives another marital asset of equivalent value as compensation. This method requires a known present value of the pension.
• Deferred Distribution Method – Division is delayed until the plan actually pays benefits. The benefits may or may not be divided equally.

In order use the Deferred Distribution Method, a Qualified Domestic Relations Order (QDRO) is required. A QDRO is a court order that allows a retirement plan to pay benefits to another payee. QDROs must be drafted to convey the terms of the settlement or judgment properly and ensure the benefits are paid correctly. If mistakes are made, it could translate into a significant financial loss. Our attorneys are experienced in drafting effective QDROs for pension plans and other retirement assets. We make sure your rights and your benefits are protected.

Meet With a St. Charles, Illinois Asset Division Lawyer

Preserving your retirement savings in the event of divorce is important. At Shaw Sanders, P.C., we can provide you with clear legal guidance and representation for obtaining a court order to divide your retirement assets. If your divorce will involve distributing retirement assets like a pension, 401(k), or 403(b), contact Shaw Sanders, P.C. by calling 630-584-5550 to schedule a no-cost consultation. We will discuss your financial situation, how you would like to see your retirement assets divided, and what your legal options are. Our firm represents clients throughout Kane County and the surrounding areas including St. Charles, Geneva, Aurora, Batavia, Wheaton, Yorkville, Elgin, and DeKalb, Illinois. Do not hestitate to reach out to us if you have any questions.