Splitting a service member’s military retired pay in a divorce is a very complex process. There are specific requirements that must be met before the Defense Finance and Accounting Service (DFAS) will divide a member’s military retired pay and pay a portion to the former spouse. The following information should be addressed and considered when dividing military retired pay:
Jurisdiction. The civil court must have jurisdiction over the service member before it can divide military retired pay, unless the service member waives or consents to jurisdiction of the court.
10/10 Rule. Under the Uniformed Services Former Spouses Protection Act (USFSPA), the couple’s marriage and military service must have overlapped by ten (10) years in order for the spouse to receive any portion of the military retired pay. Note: There are ways to craft a settlement agreement or divorce decree that give the spouse some or all of the military retired pay regardless of how long the couple was married.
Pension. Military retired pay is more like a pension than a retirement account. The service member does not pay or invest any money into the account. It is a benefit paid by the military to the service member every month until he or she dies.
Veteran’s Disability Payments. Depending on how disabled the service member is (based on a VA determination), the monthly amount of military retired pay may be reduced by the monthly amount of VA disability pay the service member is receiving.
Disposable Military Retired Pay. The amount of military retired pay that is subject to division is the disposable amount, not the gross amount. The gross amount is reduced by certain items, such as simultaneous payments of VA disability benefits and the premiums for Survivor Benefits Plan (SBP).
Death of Former Spouse. If the former spouse dies while receiving military retired payments, the portion he or she was receiving will go back to the service member. The former spouse cannot designate a beneficiary to receive those payments after death.
Death of Service Member. Upon the service member’s death, all military retirement benefits paid to both the service member and the former spouse terminate.
Survivor Benefits Plan (SBP). This is an annuity for spouses or former spouses when a service member dies and military retired benefits terminate. The service member must designate the (former) spouse as beneficiary of the Plan and the monthly premium payments for the Plan will be taken out directly from the military retired pay.
Whether you are the service member or former spouse, it is worth your time to address each area of military retired pay before entering into an agreement or presenting your case in court. Our experienced attorneys are here to help should you need any guidance along the way.