Dividing Military Retired Pay
One of the most important issues in a military divorce is the potential division of a service member's retired pay. The division of military retired pay is governed by the Uniformed Services Former Spouse Protection Act (USFSPA).
The USFSPA does not automatically give a former spouse any rights to the service member's retired pay. Rather, the law permits a state court to treat disposable military retired pay as “marital property” and therefore divide it in a divorce action in such a way that it is paid to the former spouse directly by the DFAS. Disposable retired pay is defined as gross retired pay less authorized deductions.
For court orders dividing retired pay as property to be enforced under the USFSPA, a service member and former spouse must have been married to each other for 10 years or more during which the member performed at least 10 years of military service creditable towards retirement eligibility (the so-called “10/10 Rule”).
The USFSPA also provides a method for enforcing child support and alimony orders. The 10/10 Rule does not apply to enforcement of child support or alimony awards under the USFSPA.
The spouse's share of retirement pay is usually based on the service member's average pay for the 36 months preceding the filing date. This is known as a "High 36" calculation. However, the maximum that can be paid to a former spouse under the USFSPA is 50 percent of a service member's disposable retired pay. In cases where there are payments due under both the USFSPA and under a garnishment for child support or alimony, the total amount payable cannot exceed 65 percent of the member's disposable earnings.
Finally, any division of military retirement that is not paid through DFAS will need to address the tax consequences so that the tax burden is fairly shared between the parties. This will require the service of a lawyer who is experienced in federal income tax law.
“The military pension will frequently pay between $1 million and $3 million over the course of a retirement. Yet, people hesitate to hire an experienced lawyer to do the calculations correctly. This is roughly analogous to buying a diamond engagement ring from someone off Craigslist without even opening the box.”
We can help you make sense of how military retired pay should be divided.
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