How Military Pensions Are Divided In Divorce

How Military Pensions Are Divided in Divorce: What You Need to Know

Divorce is challenging, and dividing a military pension adds another layer of complexity. Military pensions are often one of the most valuable assets in a divorce, and their division involves a mix of state and federal laws. Understanding these rules is crucial to protect your fair share of the pension and ensure financial stability post-divorce.

The Unique Nature of Military Pensions

Military pensions are governed by the Uniformed Services Former Spouses' Protection Act (USFSPA), allowing state courts to treat military retirement pay as marital property. However, the division varies depending on state law, the length of the marriage, and the service period.

Key Issues to Consider When Dividing a Military Pension

1. Length of Marriage and Service Overlap: The 10/10 rule is crucial for military pension division. If the marriage and military service overlap for at least 10 years, the Defense Finance and Accounting Service (DFAS) can make direct payments to the former spouse. Even without meeting this requirement, the spouse may still be entitled to a portion of the pension, but payments would be made through the service member.
2. Survivor Benefit Plan (SBP): The SBP is an annuity allowing a retired service member to provide continued income after their death. It’s important to address SBP during divorce proceedings, as failure to secure this can leave the former spouse without long-term financial security.
3. Cost of Living Adjustments (COLAs): Military pensions include COLAs, annual increases to keep up with inflation. It’s essential to ensure that the pension division accounts for these adjustments, allowing your share to grow with the service member’s benefits.
4. Disability Pay: Disability pay complicates pension division. Military disability benefits are not divisible under USFSPA, but if the service member opts for disability pay, it can reduce the retirement pay, potentially lowering the former spouse’s share.
5. Jurisdiction and State Laws: State laws impact how military pensions are divided. Community property states, like Texas, divide marital property equally, while equitable distribution states, like Maryland and Virginia, divide property based on fairness, which may not mean an equal split. Understanding how your state handles pension division is vital.

The Risks of Not Understanding the Rules

Failure to understand the rules governing military pension division can lead to financial losses. For example, not securing SBP coverage can result in losing benefits if your former spouse dies. Similarly, overlooking COLAs can diminish your pension share over time. The complexity of disability pay also affects the pension division, potentially reducing the amount you receive.

How to Protect Your Fair Share

Given the complexity of dividing military pensions, consulting with an attorney who specializes in military divorce is essential. An experienced attorney can:

1. Understand the Full Value of the Pension: Ensure all aspects of the pension, including COLAs, SBP, and disability waivers, are factored into the division.
2. Navigate State and Federal Laws: Help you understand how state and federal laws interact. For example, Maryland and Virginia courts apply equitable distribution, considering various factors for a fair division, while Texas, a community property state, divides pensions equally.
3. Negotiate or Litigate to Protect Your Rights: Work to secure a fair division of the pension, either through negotiation or litigation, ensuring your contributions and financial needs are reflected.
4. Address Disability Pay Issues: Navigate the complexities of disability pay and its impact on your pension share.

Conclusion

Dividing a military pension in divorce is a complex process requiring a thorough understanding of both state and federal laws. The stakes are high, and without the right guidance, you could lose a significant portion of your financial future. By working with an experienced military divorce attorney, you can protect your fair share of the pension and secure your financial stability.

At Patriots Law Group, every military-connected client is assigned a former JAG attorney, ensuring that no critical detail is overlooked. Contact us today at 301-952-9000 or by using our scheduling link (CLICK HERE) for a consultation and ensure your financial future is safeguarded. We’ve got your six!

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Reading this blog does not create an attorney-client relationship. For specific legal advice, please contact an attorney directly.