Can I Protect My 401(k) During Divorce Proceedings in Illinois?

Can I Protect My 401(k) During Divorce Proceedings in Illinois?

By: Gordon & Perlut, LLC

Even if only one spouse makes all the financial contributions, at least in most cases, 401(k)s and other retirement accounts are marital property in Illinois. One spouse contributes financially, and the other spouse contributes non-financially. Both contributions have equal weight. So, a retirement account is subject to equitable division upon divorce.

For both spouses, a 401(k) or another retirement account usually has an emotional value that, in many cases, exceeds its financial value. During a divorce, a 401(k) represents a reward for long-term savings as well as future financial security. Only a Chicago or Skokie divorce lawyer can effectively protect these legal and financial rights.

Prenuptial Agreements

In most areas of life, an ounce of protection is often worth a pound of cure. This aphorism is applicable to a 401(k) in a divorce case. A prenuptial agreement often resolves conflicts over things like retirement account distribution in advance. So, if you have been married before, you should at least consider a premarital agreement. Typically, your 401(k) has already been divided once. It’s very important to protect what remains.

Furthermore, Illinois lawmakers recently adopted the Uniform Marital and Premarital Agreements Act. So, the web of laws and cases which once governed premarital agreements is gone. Now, these pacts are much more straightforward.

A prenuptial agreement can cover a wide variety of financial and non-financial topics. Prenups classify property as marital or non-marital and also include distribution provisions. Non-financial topics include succession and inheritance provisions. These clauses are especially useful if the couple has a family business to pass along to their children.

Most judges uphold most premarital agreements, as long as the terms are not grossly one-sided and each spouse had an independent divorce lawyer throughout the process.


A retirement account is often the largest marital property asset in a divorce. However, a 401(k) is only one asset. So, there is plenty of room for a set-off.

Assume husband and wife are relatively new homeowners when they divorce. Especially if it means keeping the children in the family home, the wife might agree to take a smaller portion of the husband’s 401(k) in exchange for all the equity in the home and outright title to the residence. This arrangement might be a good deal for a husband since the couple probably has little equity in their home and a judge would most likely order such a division anyway.

Military retirement accounts work a bit differently, because of the 10-10-50 rule. If the marriage lasted at least ten years and the account owner had at least ten years of service, the government usually divides the account 50-50. Different divisions are available, but the procedure is rather complex.

Give and take of this nature often involves mediation. During mediation, an unaffiliated Chicago or Skokie divorce lawyer or other neutral professional works with both sides and tries to facilitate a settlement.

Contact a Dedicated Cook County Divorce Lawyer

Divorce does not necessarily mean the loss of half your retirement savings. For a free consultation with an experienced Chicago or Skokie divorce lawyer, contact Gordon & Perlut, LLC at 312-360-0250. Convenient payment plans are available.