Divorce and Your Military Retirement
With the passage of the Uniformed Services Former Spouses Protection Act in 1982, individual states gained the freedom to classify military retirement as marital property and divide it in the context of divorce, overturning a previous holding of the United States Supreme Court. Military retirement now plays an important role in the divorce cases in which it becomes an issue.
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How Entitlement is Calculated
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Calculating a spouse's entitlement to your military pension is similar to calculating her entitlement to a civilian pension. Under state laws regarding community property or equitable distribution of marital property, courts first calculate the marital portion of the retirement plan. They do this by applying a fraction, sometimes called the "coverture fraction," in which the numerator is the total time in service during the marriage and the denominator is the total time in service, overall. The former spouse then receives her share of the marital portion of the total entitlement. If you have not retired at the time of classification and division of your military pension, the exact amount of the other spouse's entitlement cannot be known.
How and When It Gets Paid
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The federal government administers the court's order and divides your military retirement by deducting the amount of the former spouse's entitlement from your check every month and paying it to her. State law dictates when she can begin to collect. Some states require the service member to begin paying the entitlement as soon as he becomes eligible to retire, even if he intends to remain on active duty. The majority of states, however, require her to wait until the service member actually retires.
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Present Valuation
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While some states divide military retirement and award the former spouse her share of the marital portion of the pension, not all states distribute retirement this way in every case. In a situation where a service member has not yet retired, family courts in some states may find it more appropriate to determine the present value of future pension payments, award the entire pension to the service member, and compensate the former spouse for her share out of other marital assets. When the estate lacks sufficient assets to satisfy a desired distribution, courts can sometimes order the service member to make "distributive payments" to equalize the division.
Role In Other Family Law Issues
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If a service member has already retired and is receiving benefits, those benefits can be considered income in cases involving child and spousal support. Eligibility for free health insurance, while not considered "income" for tax purposes under current law, can increase the amount of disposable income available to the military retiree, thereby increasing his ability to pay spousal support.
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