When we divorce, will my wife still receive her military retirement benefits? Retirement benefits are typically regarded as marital property. Even if it relates to a job in the private sector or the military, it is a marital asset and as such is subject to property division.
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During the divorce process, military families frequently have the same worries and objectives as civilian families. Even though things are unknown and stressful right now, you have decided that the time has come to end your marriage because you want to provide your family the greatest potential future. However, some components of the divorce procedure are distinct from those involving two civilians if one or both spouses are in the military. For example, the aspect of property division as it concerns retirement benefits are handled differently in a military divorce.
Military retirement benefit meets the definition of a marital asset if it arises during the marriage. The division will be decided by the court. The beneficiary is determined by the court. The same is true even in the case of a military marriage. It will be regarded as marital property and be divided according to law.
What Is the Truth About Military Divorce and Military Retirement Benefits in the Service Branches?
Every state has its own regulations regarding how military divorces affected pensions as of December 2016. The majority of states administer all pensions in the same way, providing the spouse a portion of the pension equal to the ratio of the years of marriage to the years of employment, divided by 2.
For instance, your spouse would receive 25% of your pension, or a total of 12.5%, if you worked for 20 years to earn your pension and were married for 5 of those years. Your spouse would get the entire 50% of your pay if you worked for 20 years, were married before you started, and got divorced the day before you retired. This approach or formula used to derive this division is referred to as the “Time Rule”.
However, the National Defense Authorization Act for Fiscal Year 2017 was passed by Congress in December 2017, adding a Federal provision that preempts all state laws and dictates how military pensions must be handled. It specifically amends the Uniformed Services Former Spouses’ Protection Act or USFSPA in that section. The new rule mandates that the pension be split equally between spouses as if the military officer had retired on the day of the court order.
In other words, just the benefits the military spouse has accrued at the time of divorce are divided, rather than the entire benefit earned upon retirement between the two spouses. After the divorce, any pension that the military spouse accrues is recognized as independent property. This is another approach to property division in a military divorce known as the “Frozen Benefit Rule” or “Snapshot Rule”.
In states where the Time Rule is the default and both spouses have pensions, this obviously produces a considerable discrepancy. The non-military spouse may suffer significant losses if the pension of the military spouse is divided in accordance with the Snapshot Rule while the pension of the non-military spouse is divided in accordance with the Time Rule.
Who Has Jurisdiction? Who Gets to Decide on Military Divorce?
A military person can maintain residency in his or her home state, where they lived before they were called to active duty, even though it may be allowed to file for divorce where they are now stationed.
For the purpose of filing for divorce in Michigan, a service member’s residency is established by maintaining a Michigan driver’s license, exercising their right to vote there, owning property there, paying taxes there, or in any other way demonstrating their intention to remain there. In general, intent establishes whether or not a person intends to continue living in Michigan.
Your case may be significantly impacted by your choice of residence. You may want to file for divorce in Michigan even though you may have been stationed in Virginia for the past year in order to avoid the protracted waiting time for a divorce that Virginia requires.
Orders dividing retired pay as property must have been made by a state court that had jurisdiction over the member because:
- [ a ] The member’s residence within the court’s territorial jurisdiction, other than due to a military duty;
- [ b ] The member’s residence within the court’s territorial jurisdiction; or
- [ c ] The member’s agreement to the court’s jurisdiction;
- [ d ] By participating actively in the court case, the member expresses his or her agreement to the court’s jurisdiction.
Even if you reside in Michigan for the purposes of divorcing, it’s possible that Michigan does not have jurisdiction over the minor children to deal with matters of custody, parenting time, or child support. The Uniform Child Custody and Jurisdiction Enforcement Act (UCCJEA) will be used to decide who has jurisdiction over minor children.
How Are Retirement Benefits Handled in a Divorce?
The “10/10 rule” stipulates that an individual can only receive payments directly from the Department of Finance and Accounting (DFAS) if they comply with the USFSPA’s standards. According to this criterion, the couple must have been together for at least 10 years, and the military member must have rendered 10 years of active duty during that time. The other spouse is not eligible for payments directly from DFAS if the pair has not been married for 10 years or if the serving spouse has not served for 10 years.
If it is stipulated in the divorce agreement, a person may still be eligible to receive a portion of their spouse’s military retirement salary. The USFSPA not only establishes the 10/10 rule but also permits each state to follow its own regulations and take into account military retirement benefits when dividing property. In Michigan, courts attempt to divide marital assets in an equitable way, therefore a 50/50 split is not always guaranteed. A person may get up to 50% of the total retirement payout if they are given a portion of their ex-military spouse’s benefits as part of the divorce settlement.
Two goals were achieved by the USFSPA, 10 U.S.C. 1408.
- [ a ] It acknowledges that state courts have the authority to pay a spouse or ex-spouse from the military’s retirement pay (hereafter, the former spouse), and
- [ b ] It offers a strategy for carrying out these directives via the Department of Defense.
A former spouse is not automatically entitled to a share of the member’s retired pay under the USFSPA. A percentage of a military retiree’s pay must have been assigned to a former spouse as property in the final court judgment. The USFSPA also offers a way to enforce child support that is currently due and/or that was previously owed (in arrears) and current alimony that was stipulated in the court order.
Final divorce, dissolution, annulment, and legal separation decrees as well as court-ordered property settlements related to such decrees are all court orders enforceable under the USFSPA. The relevant court ruling must specify how to provide retirement pay as property, alimony, or child support to a former spouse.
Prior to June 26, 1981, court orders that awarded a portion of military retired pay as property may be honored if the USFSPA’s standards are met. The USFSPA, however, prevents the enforcement of changes made after June 25, 1981, to court orders made before June 26, 1981, which were quiet about the split of retired pay as property. Additionally, the USFSPA does not execute court rulings that were granted before November 14, 1986 if any part of a member’s military retired pay is based on disability retired pay.
Benefits are provided under Section 1408(h) of the USFSPA to a former spouse of a member who, as a result of the abuse of a spouse or dependent child, loses the right to retired pay after becoming eligible for retirement owing to years of service. If the specific criteria of Section 1408(h) are met in addition to all other ordinary USFSPA requirements, a former spouse may enforce an order distributing retirement salary as property under this Section.
When a person enlists in the military, they are eligible for a number of perks, including access to numerous military sites, free or reduced healthcare, and generous retirement benefits after their time in the service is over.
You should be aware of how those benefits are handled in the event you and your spouse cannot agree on how they should be divided if they turn out to be an asset of interest during a divorce. Talk to an attorney to find out how to approach this issue in a military divorce.
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