Here in Arizona thirty years ago, the U.S. Supreme Court held that military pensions could not be divided by court order as marital property without congressional legislation authorizing such a division.
Congress responded in 1982 by passing the Uniformed Services Former Spouses’ Protection Act (USFSPA), which served two essential functions. One, the federal USFSPA allows state courts to define military pensions as marital property for purposes of division in divorce.
Two, payments to former spouses of military members could receive their marital share directly from the Defense Finance and Accounting Service (DFAS). For former spouses married for 10 years or longer during the service period, enforcement would no longer be an issue — the service member would not control the actual payments. Under the USFSPA, only the former spouse (or former spouse’s attorney) may apply for direct pay. The service member cannot apply for the direct pay on behalf of the former spouse.
Before military retirement benefits may be divided, the state court has to establish jurisdiction over the pension. Jurisdiction over the retirement is established consensually when the service member is the petitioner in the divorce, the one who initiates the court action. If the member didn’t file the petition, but consents to jurisdiction by responding to the petition, then jurisdiction is established over the pension. Putting consent aside, however, the nonmilitary spouse who files will have to establish jurisdiction over the pension by filing in the service member’s home state (home state being the one listed on the Leave and Earnings Statement (LES).
If the marriage lasted 10 years or longer while the member was in the service (a 10-year overlap), then the DFAS will pay the former spouse his or her share directly from the retirement fund. If the marriage was less than 10 years in duration, or the marriage coincided with less than 10 years of military service, then the DFAS will not enforce the order to divide the pension. Instead, the former spouse will be paid his or her share directly from the service member. As you might expect, this is where enforcement issues arise.
To avoid the 10-year rule, some former spouses will accept increased spousal maintenance instead of a share of the military pension. The reason being that spousal support does not have the same DFAS 10-year overlap restriction on direct payments.
The DFAS is further restricted. Direct payments to the former spouse are limited to 50% of the retired service member’s disposable retired pay. (If the pension is under a garnishment order for child support, then up to 65% of the retiree’s disposable retired pay may be paid directly to the former spouse.)
If the marriage was 20 years or longer in duration, and 20 years of marriage overlapped 20 years of military service, then the former spouse is also eligible for additional benefits: medical, commissary, and exchange privileges. These additional benefits terminate when the former spouse remarries, but the benefits are revived if the subsequent marriage is terminated, too.
So as you can see it is complicated because both state and federal law is involved, a lawyer for you is a good idea.
Also here if spousal support comes into play getting this done by Dec. 31th of this year is a good idea because it is still deductible as tax laws will change on this issue.
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