Division of Military Benefits and Property and Military Divorce FAQs

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In order for states to divide the service member's retired pay as marital property (as opposed to alimony or child support); USFSPA requires state courts to show that the court is able to hear the case as it relates to division of the military spouses’ pension.

The state court may hear the case if the military spouse meets either of the three requirements:

• Domiciled within the jurisdiction of the court, meaning at the time the action was commenced, the service member had made that state his true, fixed, and permanent home and intended to return to it, or
• Residence is within the state and service member resides within the state for other purposes unrelated to military assignment.
• Consent to jurisdiction.

This three-part jurisdictional requirement that USFSPA imposes applies only where states are to divide military retired pay as property. When it is apportioned or assigned as alimony or child support, the court is treating it as income, not property.

A non-military spouse may receive retired pay if the supporting spouse has retired from the military. Retired pay is the total monthly pay to which a retired service member is entitled, less most VA disability pay, federal debt repayments, fines, forfeitures and Survivor Benefit Plan premiums.

Retired pay as property awards must be expressed as:

• A fixed dollar amount, or
• A percentage of disposable retired pay (gross retired pay less allowable deductions).

Moreover, under the guidelines of the USFSPA, any division and distribution of the military member’s retirement to a former spouse must meet the 10 year requirement test. If a former spouse has been married to the service member for at least 10 years, during which the member performed at least 10 years of creditable service for retirement purposes, then a former spouse may receive direct retired pay benefits. Furthermore, if the former spouse meets the 10 year test, a court order must specifically state that the award shall be made as direct payment of retired pay in order for the former spouse to receive payments from DFAS.

In North Carolina, for example, the court can divide the pension by ordering that a portion be paid to the non-service spouse upon the service member's retirement. This would be paid on a monthly basis as long as the retiree receives payments. The payments could come from the retiree or, if the "direct payment" conditions are met, directly from DFAS so long as it is contained in a court order.

A military spouse is eligible to receive full benefits if the spouse meets the 20/20/20 test under USFSPA’s federal guidelines. This three-part test requires that you must:

• Been married to the service member for at least 20 years.
• The service member must have performed at least 20 years of creditable service toward retirement; and
• At least 20 years of the marriage must overlap with at least 20 years of active service.

If these requirements are not met then the spouse may be entitled to recover partial benefits under the 20/20/15 test which allows the spouse to receive transitional benefits for up to one year if at least 15 years of the marriage overlapped with at least 15 years of active duty service. A final alternative allows for the spouse to receive health care coverage through the DoD Continued Health Care Benefit Program, a premium-based temporary health care coverage program, for 36 months of coverage until alternative coverage can be obtained. Further information about this program is available on the Tricare website.

At Arnold & Smith, PLLC we are committed to helping clients through this emotionally challenging process. Our Attorneys have years of experience handling the division of assets and post separation support. Contact Us now to get your consult scheduled.

Q. What is the Defense Financial and Accounting Service and why is it important?

A. Once a former spouse has received a court order to be awarded a share of military retired pay, direct payment comes from the Defense Finance and Accounting Service (DFAS). If these conditions are met, then you can get monthly checks from DFAS located in Cleveland, Ohio.

Q. Is there a maximum amount that a former spouse can receive under USFSPA?

A. Yes. USFSPA limits pension division awards to 50 % of the member's disposable retired pay. However, if there are also alimony and/or child support orders against the military spouse then the maximum can be raised to 65%.

Q. Is there any way the court can divide the retired pay so I don't have to wait until my husband retires?

A. USFSPA specifically forbids state courts from ordering a service member to retire in order to divide the pension. In fact North Carolina does not allow this however, North Carolina law does, allow the present value of the pension to be used as a trade against other property that the non-service spouse will receive.

Q. How much of the retired pay will be divided or awarded to me?

A. The court can only divide the "marital portion" of the pension, that is, the portion that was earned during the marriage before the date of the military couple separated. The rest of the pension that was earned before the marriage or after the separation of the parties is separate, meaning non-divisible property. Federal law says that no more than half of the pension can, under most circumstances, be divided. North Carolina law presumes an equal division of all marital property, including retirement rights.

Other than this, there is no way of telling how much marital property will be awarded or how much of the pension will be granted.

Q. If I receive full medical benefits, can I also be covered by other medical insurance?

A. No. If a former spouse receives full benefits then the spouse cannot be covered by any type of individual medical insurance plan or employer-sponsored medical coverage.

Q. May I retain full medical benefits if I remarry?

A. No. The former spouse must remain unmarried. Any subsequent remarriage eliminates the benefits, even if the spouse is later widowed or divorced.

Q. If I die, what happens to the pension division award?

A. USFSPA mandates that the former spouses rights to a portion of military retired pay end upon the spouse’s death. Payments cannot be made to an estate, survivors or heirs.

Q. Do I still continue to receive the benefits after the service member dies?

A. It depends. Federal law states that, in the event the service member dies, the person receiving the award shall receive no further pension division payments. There may, however, be payments under the Survivor Benefit Plan (SBP) if that has been elected by the member. SBP payments allow the continued flow of income to a non-military spouse after the member's death. The court can order a spouse to provide SBP coverage for the non-service spouse. The order, to be effective, must be served on DFAS within one year after the divorce; otherwise it will not be honored.