A former spouse is eligible to receive direct payments from a retiree’s retired pay if the court order pleases the requirements and conditions specified for such payment. In the case of a division of property, the court order specifically must provide that payment is to be made from disposable retired pay. Disposable retired pay is a service member’s monthly retired pay minus qualified deductions.
To establish eligibility for a court-ordered division of retired pay as property, the former spouse must have been married to the member for 10 years or more during which time the member performed 10 years creditable service. Court-ordered payments for child support and/or alimony do not require a specified length of marriage.
In 1981, the U.S. Supreme Court ruled that military retired pay could not be treated as community property in divorce cases. In response, Congress enacted the Uniformed Services Former Spouses Protection Act (USFSPA) which decreed that state courts could treat military retired pay as property in divorce cases if they so choose. For the service member, it is important to know the options when considering division of retired pay in a military divorce.
There are four potential options when bearing in mind a division of retired pay:
• Stated dollar amount: When expressing the award using a dollar figure, the Former Spouse is not afforded a COLA adjustment and the member would receive that portion added to their portion of the retired pay.
• A percentage amount: This method is not usually used when you don’t know the exact date of retirement, due to un-matured pension
• Coverture fraction formula: The most common way to divide a Military pension that has not yet matured would be through the use of a marriage coverture fraction formula. This formula simply divides the number of years of creditable service during marriage (numerator), into the total number of years of creditable service at the time the Member would retire (denominator). The payment of an amount of retired pay must be expressed in dollars or as a percentage or fraction of disposable retired pay
• Delayed order option: A deferred percentage is simply placing an order with the Military today, but leaving the calculation and conclusion, open. This is so when the member applies for retired pay, all the parties would be notified and a “clarifying court order” would then be required.
Each has its own advantage and/or disadvantage to you and/or your former spouse. It is important to know how each method effects your financial situation and even more important to get the best legal advice to clarify any confusion in your options.
If you have specific questions or need help with your military divorce, contact Thorsteinson Law Group, your trusted and experienced divorce and family law attorney.