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Military members who retire after at least 20 years of service are entitled to a lifetime pension. Since this timeline often means retiring in their 40s, these pensions are often the biggest asset a military family owns. Depending on the service member’s rank, a pension can be valued at anywhere from around $330,000 to $1.2 million. This means that in a military divorce, the pension is usually the major asset at stake, as opposed to a house or retirement account in a civilian marriage. Those going through a military divorce need to understand how to divide the pension and the other rights they may have.
The Uniformed Services Former Spouses Protection Act is a federal law that gives ex-spouses of military members certain benefits. These include access to military healthcare and base access. The law also specifies that the military member’s pension, called military retired pay, should be treated as an asset rather than income. This changes how courts calculate how the pension should be divided. The non-military former spouse can qualify for up to 50% of the pension.
The military uses what’s called the 20/20/20 rule to determine whether a former spouse qualifies for base privileges like commissary and exchange access and for Tricare eligibility. This rule means that a couple needs to have been married for 20 years, the military member needs to have served for at least 20 years, and there needs to have been at least 20 years of overlap between the other two time periods. If a former spouse qualifies, they’ll be able to keep their military healthcare and base access until they remarry. If the marriage and the military service each lasted 20 years, but they only overlapped by 15 years, the former spouse can receive a year of transitional healthcare through Tricare. Those in shorter marriages may lose health coverage as soon as the divorce is finalized.
Because they move so frequently, current service members are less likely than the average American to own a home. Since only 43% of military members are homeowners, the biggest asset at stake in most military divorces is the pension. The law has established that retired pay is considered a marital asset, but disability pay is not. If the couple was married for at least 10 years, and that time period overlapped with at least 10 years of military service, the former spouse can receive their portion of the pension from the military directly. Otherwise, the plan for making these payments will need to be specified in the divorce agreement.
Division of the pension is subject to negotiation. Each party can ask that their former spouse receive more or less depending on the circumstances of the divorce and the overall financial situation. If the couple owns a home or has other assets, these will be subject to the same rules for division as they would in a civilian divorce.
The pension division also becomes more complicated if the marriage and military service didn’t fully overlap. Generally, only the portion of the pension that was funded during the marriage is considered marital property. If the military spouse served for 20 years, but the couple was only married for ten years, the former spouse wouldn’t be entitled to the portion of the pension associated with the first 10 years of service.
While the military pension is often the biggest financial asset in the marriage, it is ultimately a form of future income, which makes dividing it riskier and more complicated than an agreement involving current income. If the military spouse is currently serving and has been in the military for less than 20 years, there’s no way to know whether they’ll ultimately remain in the military long enough to get their retirement pay. For this reason, some former spouses opt for a buyout, which is a one-time payment at the time of the divorce.
Otherwise, the divorce agreement usually specifies either a dollar amount or a percentage of the pension that the former spouse will receive. It’s important to be specific about how the division will happen and how the pension is being valued. If the agreement doesn’t specify, it can create problems later on.
If the couple does own a home or other property, this can change the division. Some spouses ask for full ownership of the home in exchange for giving up their claim to the pension. Depending on how the value of the two compare, this can be a good decision. It’s also another way to reduce risk if the military member isn’t retired yet.
If the military member is retired and already receiving retired pay, the divorce is more likely to result in a split of this income. Since it’s a guaranteed amount, it’s easier to calculate and doesn’t involve any uncertainty for the non-military former spouse.
Former spouses should start by understanding the value of the military spouse’s pension and any other shared property. Non-military spouses should take a closer look at the Uniformed Services Former Spouses Protection Act to make sure they understand their rights. Military members should look at the Service members Civil Relief Act, which can offer them protection in case their service makes it difficult to present their side of the divorce case.
If it’s an option, remaining as civil and cooperative as possible will yield the best results in any divorce. In some hostile divorces, service members have opted to leave the military after 19 years so their former spouse can’t receive their share of the pension. This kind of behavior ultimately gets worse results for both parties, so it’s best to come to a peaceful agreement if one is available.
Military divorces can involve some unique property division considerations, specifically surrounding the service member’s pension. When hiring a divorce attorney, it’s important to choose one with specific military experience who understands these issues.
If you need help with a divorce case, call 619-299-9780 to schedule a free telephone consultation or contact a San Diego family law specialist here.