Military Divorce: Military Retirement Benefits

The difference between something good and something great is attention to detail – Charles R. Swindoll

If you or your spouse is a military service member and you are contemplating or going through a divorce, besides the normal issues arising in a divorce situation, the existence of a military status brings with it specific issues that must be handled with great attention to detail.  For example, in a divorce setting, the state and federal governments provide specific rules and guidelines regarding the division of a military spouse’s retirement benefits.

In Tiffault v. Tiffault, 303 S.C. 391, 401 S.E.2d 157 (1991), the Supreme Court stated that “military retirement benefits accrued during marriage constitute a joint investment of both parties [and] vested military retirement benefits constitute an earned property right which, if accrued during the marriage, is subject to equitable distribution.”  Tiffault at 392, 401 S.E.2d at 158.  In other words, if you are contemplating or currently going through a divorce, your or your spouse’s military retirement benefits are marital property and are subject to equitable division.

Even if your or your spouse’s military benefits have not yet vested, the family court can apportion them and order that payments begin upon vestment.  And, although retirement pay does not vest until actual retirement, which requires a minimum of twenty (20) years of service, the Uniformed Services Former Spouse’s Act (USFPA) entitles a spouse to receive a share of retirement pay through direct payments from the government after ten (10) years of marriage that coincide with ten (10) years of service.  10 U.S.C. Sec. 1408; 32 C.F.R. Sec. 63.6(a)(2) (2000).  This is often referred to as the 20/10/10 rule and applications for direct garnishment must be made through the Defense Finance and Accounting Service (DFAS).  If your marriage has not coincided with a minimum of ten (10) years of service, the right still exists, but the spouse must receive payments directly from the retired member rather than through the DFAS.

Regardless of whether you find yourself in a situation where the court order provides for payment through DFAS or from the military spouse to the non-military spouse, “[t]he total amount of the disposable retired pay of a member payable under all court orders…may not exceed fifty percent of such disposable retired pay.”  10 U.S.C. Sec. 1408(e)(1) (1990).  However, the service member may agree to pay a higher amount.  See Coon v. Coon, 356 S.C. 342, 588 S.E.2d 624 (Ct. App. 2003).

It is important to point out that if you are a spouse of a military service member you are not automatically entitled to equitable distribution of your military spouse’s retirement benefits.  In Walker v. Walker, 295 S.C. 286, 368 S.E.2d 222 (Ct. App. 1988), the court held that the non-military spouse must demonstrate making some contribution to the military retirement benefits procurement.  For example, as in the Walker case, the court found the wife was not entitled to military benefits pay where the wife lived with her parents while the military spouse traveled on assignments, the couple never established a marital home, and the couple never had children together.  But, examples of courts finding a demonstration of contribution include situations where non-military spouses have moved with the military spouse several times over the course of a marriage and have cared for the children and home.  See Ball v. Ball, 312 S.C. 31, 430 S.E.2d 533 (Ct. App. 1993), aff’d 314 S.C. 445, 445 S.E.2d (449) (1994); see also Curry v. Curry, 309 S.C. 539, 424 S.E.2d 552 (Ct. App. 1992).

Another important distinction is made between retired pay, which is subject to equitable distribution, and disability pay, which is not subject to equitable distribution.  The Former Spouses’ Protection Act (FSPA) excludes military retirement pay which has been waived to receive veteran’s benefits from its definition of “disposable retired pay” which can be treated as marital property subject to division.  However, you and your spouse can agree to divide military disability benefits and must be careful to clearly state in such agreements whether the spouse’s share of military retirement pay includes disability pay.

It is not hard to see that the issue of military retirement benefits in a divorce setting can become complicated and should be addressed with attention to detail.  There are many aspects, both covered and uncovered by this blog conversation, so I encourage you to carefully consider and address the issue of military benefits when contemplating or going through a divorce.