When Is a QDRO Used in an Illinois Divorce?

 Posted on July 13, 2026 in Asset Division

Getting divorced can be a tough process, both emotionally and financially, and even after a divorce is finalized, sometimes certain financial issues can linger for years if they were not addressed properly during the divorce process.

An important part of many divorces is the process of dividing retirement accounts. This is usually done by using a document called a "Qualified Domestic Relations Order" (QDRO). By understanding when a QDRO may be used, and how it can affect your financial future, you can make sure you are taking the correct steps to protect your interests during your divorce.

Our Hillside, IL divorce and asset division attorney can explain this document further, and help you understand whether you need one yourself.

What Is a QDRO?

A "Qualified Domestic Relations Order" is a court Order that specifies what the division of retirement accounts that are classified as marital property will be. QDROs are typically used when dividing 401(k)s and pension benefits because, without a QDRO, a division of retirement benefits might result in taxes, penalties or other complications.

When Are QDROs Needed?

A QDRO may be needed if a spouse has participated in an employer-sponsored retirement plan, and the funds in that retirement account are to be divided between spouses as part of the divorce settlement.

When a QDRO is tendered to the administrator of a retirement plan, funds are withdrawn from an existing account and transferred to an "alternate payee," who is the other spouse. It should be noted that QDROs are not to be used for certain types of accounts, including individual retirement accounts (IRAs) - funds in an IRA are instead withdrawn using a "transfer incident to divorce," which rolls the money over into a separate account.

Pension benefits may also be divided using a QDRO. For spouses who are employees of the State of Illinois, and are eligible to receive benefits through the state's pension program, a similar court order called a "Qualified Illinois Domestic Relations Order" (QILDRO) must be used to divide those benefits.

In either of these two situations, a QDRO or QILDRO will state that a certain amount of pension benefits (usually specified as a percentage) will be paid to the pension holder's ex-spouse after the employee retires.

What Are the Benefits of Using a QDRO?

Dividing retirement assets with a QDRO provides a number of important advantages:

• It ensures that taxes or penalties will not apply to retirement funds that are withdrawn and transferred to the other spouse before the account holder reaches the age of retirement;
• It ensures that the spouse receiving the funds has access to money and control over their own assets without having to wait for the other spouse to retire (as long as the spouse reaches earliest retirement age); and,
• It allows for the quick and simple transfer of retirement funds, without the need for additional legal fees or complications.

Importantly, not every divorce involving retirement assets actually divides those accounts. Sometimes, spouses swap other assets instead, or settle for lump-sum cash payments. However, if employer-funded or state retirement benefits are divided in a divorce, QDROs and QILDROs are an essential part of the process.

Are Military and Federal Government Pensions Divided Using a QDRO?

Standard QDROs do not apply to every type of retirement benefit. Military pensions and federal civilian pensions operate under their own separate frameworks. Dividing them in an Illinois divorce requires understanding those rules alongside state property division law.

For military pensions, the "Uniformed Services Former Spouses' Protection Act" (USFSPA) governs how a former spouse can receive a share of a service member's retirement pay. Under the USFSPA, Illinois courts can treat military retirement pay as marital property subject to division, but the division itself must be carried out through a specific court order.

The order must meet the requirements of the Defense Finance and Accounting Service (DFAS), which administers military retirement pay. For a former spouse to receive direct payments from DFAS, the marriage must have overlapped with at least ten years of the service member's military service. If that ten-year overlap does not exist, the former spouse may still be awarded a share of the pension under Illinois law, but the service member would be responsible for making those payments directly rather than through DFAS.

Does Social Security Factor Into Divorce in Illinois?

Unlike 401(k) accounts and pensions, Social Security benefits cannot be divided by a court order. No QDRO or equivalent order can assign a portion of one spouse's Social Security benefits to the other, thus Illinois divorce courts do not treat Social Security as marital property that can be divided.

Instead, federal Social Security rules allow a divorced spouse to claim benefits based on an ex-spouse's earnings record under certain conditions:

• The marriage lasted at least ten years;
• The person claiming their ex’s benefits is at least 62 years old and currently unmarried; and,
• The ex-spouse's benefits are higher than what the person would receive on his or her own record.

Claiming on an ex-spouse's record does not reduce or affect the ex-spouse's own benefits in any way. These are federal Social Security Administration rules that work separately from the divorce process.

Nevertheless, these rules can meaningfully affect retirement income planning, particularly for a spouse who spent years out of the workforce, or in a lower-earning job. Understanding how Social Security, pension division, and other retirement assets interact is part of building a complete picture of your financial future after a divorce.

Contact Our Oak Park Retirement Asset Division Attorney

For divorcing spouses, deciding how to divide retirement accounts, pensions, and other assets can be quite complicated. Addressing these important issues correctly will avoid unnecessary fees, penalties or taxes, and will also ensure that you will have the financial resources you need in the future.

At the Law Office of Vincent C. Machroli, P.C., our Hillside divorce and property division lawyer can advise you of your options for dividing retirement benefits. We provide high-quality legal assistance in creating and getting QDROs approved to allow these assets to be transferred or allocated correctly. To learn more about how we can assist with any financial topics during your divorce, contact our office at 708-449-7404. We offer no-charge legal consultations.