Divorces routinely order one person to pay the other person money in the form of child support or maintenance (formerly known as alimony). If the party fails to pay, the payee has two options: 1) they can hold the payor in contempt until the contemnor pays, 2) the payee can attach the payor’s assets. Obviously, waiting on someone who didn’t pay what they owed in the first place to now pay under the threat of jail is agonizing. It’s much easier to just get permission to access their accounts and take what’s owed directly from those accounts. This is called “attachment”. Attachment is “the seizing of a person’s property to secure a judgement or to be sold in satisfaction of a judgment.” Black’s Law Dictionary (11th ed. 2019) Retirement Accounts Are Typically Exempt From Attachment But, not everything can be attached. Specifically, pensions and retirement benefits like 401ks, IRAs, etc. “The amount of income or assets that may be applied toward the judgment is limited by federal and Illinois law. The JUDGMENT DEBTOR HAS THE RIGHT TO ASSERT STATUTORY EXEMPTIONS AGAINST CERTAIN INCOME OR ASSETS OF THE JUDGMENT DEBTOR WHICH MAY NOT BE USED TO SATISFY THE JUDGMENT IN THE AMOUNT STATED ABOVE:… Pension and retirement benefits and refunds may be claimed as exempt under Illinois law.” 735 ILCS 5/2-1402(b)(5) The definition of retirement funds is extremely broad. If the money is meant and labeled for retirement in almost anyway…that money is untouchable. “A debtor’s interest in or right, whether vested or not, to the assets held in or to receive pensions, annuities, benefits, distributions, refunds of contributions, or other payments under a retirement plan is exempt from judgment, attachment, execution, distress for rent, and seizure for the satisfaction of debts if the plan (i) is intended in good faith to qualify as a retirement plan under applicable provisions of the Internal Revenue Code of 1986, as now or hereafter amended, or (ii) is a public employee pension plan created under the Illinois Pension Code, as now or hereafter amended. (b) “Retirement plan” includes the following:(1) a stock bonus, pension, profit sharing, annuity, or similar plan or arrangement, including a retirement plan for self-employed individuals or a simplified employee pension plan;(2) a government or church retirement plan or contract;(3) an individual retirement annuity or individual retirement account; and(4) a public employee pension plan created under the Illinois Pension Code, as […]
