YOUR QUESTION:
I retired from the NYNG in Feb. 2000. My wife at the time left me soon after, and was awarded half my retirement pay after 27 years of marriage. She re-married prior to age 55. She has not filed the paperwork for her half of the retirement pay since the divorce was finalized in 2001. Is she still eligible for the retirement pay after getting re-married prior to age 55?
ANSWER
YES, I regret having to tell you this, but she is still eligible for the retirement pay despite having remarried prior to age 55. Your entitlement to military retired pay, to the extent it was acquired during the years of your marriage to your now former spouse, was treated by the divorce court as a property asset of the marriage, i.e., “marital property.” And like all other marital property, the asset, even though acquired during the marriage by only one spouse and not in joint names, is subject to being divided incident to the dissolution of marriage in accordance with the divorce laws of the state in which the divorce is occurring. Federal law, the Uniform Services Former Spouses Protection Act (USFSPA), 26 USC § 1408, gives state divorce court judges the authority to do this.
When a property asset is divided incident to divorce (be it money in a bank account, or shares of stock, of the receipt of retirement benefits), it is usually fixed and final, and not subject to being lost or forfeited upon the happening of a future contingency such as remarriage. (Supposing she was awarded 1/2 the money in a bank account that had been in husband’s name alone. It would be most unusual for the judge to then order that she return her 1/2 of the money if at some future time she remarried. That is not the way property division issues are handled.)
Keep in mind that your ex-wife’s court-awarded share of your military retired pay is derivative of your own entitlement. When you are no longer legally entitled to receive 100% of your military retired pay, she will now longer be entitled to receive her court-awarded derivative 50% portion. Such will occur when you die, since military pensions are paid only for the lifetime of the retired servicemember, with no provision for the benefit to continue to the servicemember’s survivors.
However, to provide some continued financial protection for a former spouse in the event of the servicemember’s death (and the resulting loss of the income stream of her share of his military pension), federal allows a state divorce court judge to order the servicemember to elect participation in the Survivor Benefit Plan (SBP) insurance program and to designate the former spouse as the SBP beneficiary. And this is where the “age 55 remarriage” issue comes into play.
Under SBP procedures, if your former spouse remarries before age 55, her SBP coverage (if she is the SBP beneficiary) will be suspended and cost deductions from your retired pay will be stopped. The former spouse's SBP coverage is considered suspended for as long as your former spouse's subsequent marriage remains in effect. If the subsequent, marriage is terminated by death, annulment, or divorce, your former spouse's eligibility is reinstated and SBP cost deductions would resume. But if your former spouse remarries at age 55 or thereafter, her remarriage at that point in her life would have no effect on her SBP coverage (and the cost you incur for providing it).
So that is the answer to the confusion about remarriage at age 55. It isn’t the right to receive her court-awarded portion of your retired pay that ends when she remarries prior to age 55. Rather, what comes to an end (or at least is suspended) is her right to receive SBP benefits upon your death.
Now, moving on......
The fact that she has not filed the paperwork for her half of the retirement pay since the divorce was finalized in 2001 may be more of a problem to you than for her. She is entitled to receive the court-awarded portion of your disposable retired pay, and it is a legal and enforceable debt obligation that you owe to her. The “paperwork” you are referring to would be the documents she could and would submit to the Defense Finance & Administration Service (DFAS), if she opted to so, in order to have DFAS deduct from your disposable retired pay the portion awarded to her by the divorce court and pay it directly to her, thus relieving you of the responsibility of making the payment yourself.
USFSPA allows DFAS to deduct from your disposable retired pay the portion thereof awarded by the court to your former and make the payments directly to your former spouse. However, this is allowed only if the “10-10 rule” has been satisfied, meaning that the marriage was of at least 10 years’ duration, with at least 10 years of the marriage overlapping (coinciding) with at least 10 years of your creditable military service. Also, there would be no payments from DFAS to the former spouse unless and until the former spouse submitted to DFAS the necessary “paperwork,” consisting of a court-certified copy of the divorce decree or other court order detailing the division of disposable retired pay, along with DD Form 2293 (“Application For Former Spouse Payments From Retired”).
http://www.dtic.mil/whs/directives/infomgt/forms/eforms/dd2293.pdf
But while the former spouse has the right to receive directly from DFAS the money that you otherwise owe to her (the court-awarded portion of your disposable retired pay, she is not REQUIRED to receive the money in that manner. It is entirely her choice. And if she chooses not to receive the payments from DFAS (or simply fails to submit to DFAS the necessary paperwork to get it done), YOU nonetheless continue to be legally obligated to pay the portion of you disposable retired pay that was court-awarded to your former spouse. (In other words, you cannot simply keep for yourself the money that the divorce court judge awarded to your ex-spouse.)
Direct payment from DFAS has nothing to do with the former spouse’s substantive entitlement to receive her court-awarded portion of the servicemember’s disposable retired pay. Rather, it only pertains to the means and method by which she receives the payment.
In sum, if she does not get the payment from DFAS, she has every legal right to receive the money directly from you, to the extent of the court’s “award,” and you have a legal obligation to make the payment(s). Failure on your part to do so could result debt collection action being taken (garnishment of bank accounts, liens of property, etc.) and, in some states, imposition of legal sanctions such as contempt of court..
Do keep in mind, however, that to the extent you pay directly to your ex-wife the court-awarded portion of your disposable retired pay, you will be able to claim the payments as being tax-deductible “alimony paid” on your income tax return for the year in which the payments are made. (Of course, the payments received by the former spouse would be taxable to the former spouse whether characterized as “alimony received” from ex-husband or as retirement income received from DFAS, so this should make do difference to wife. But for the retired servicemember, payments actually made directly to the former spouse can be claimed by him as tax deductible alimony, which may make for a substantial tax savings to him.) The relevant case precedent from the US Tax Court is PROCTOR v. COMMISSIONER, 129 TC No. 12 (10/10/2007). See online information at:
http://www.allbusiness.com/government/government-bodies-offices-government/8916742-1.html
http://docs.cpamerica.org/wtu/proctor.pdf
http://www.ustaxcourt.gov/InOpHistoric/pro5ctor.TC.WPD.pdf
Other helpful websites:
“Silent Partner” Series from North Carolina State Bar: (MUST reading!)
http://www.nclamp.gov/s_milpens.pdf
http://www.nclamp.gov/s_soldiers.pdf
http://www.nclamp.gov/s_mpdspous.pdf
http://www.nclamp.gov/s_pension.pdf
http://www.nclamp.gov/s_wording.pdf
Everyday Errors in Military Divorce Cases --
http://www.abanet.org/family/military/militarydivorce_errors.pdf
How To Find A Military Divorce Attorney --
http://www.abanet.org/family/military/eagle_militarydivorceatty.doc
Higdon on Military Retirement Divorce
http://www.texasfamilylawinfo.com/docs/Higdon-Military_Retirement_Divorce.pdf
Retired and Annuitant Pay: Concurrent Retirement and Disability Pay (CRDP)
http://www.dfas.mil/retiredpay/concurrentretirementanddisabilitypay.html
Treatment of Disability Pay in Military Divorce
http://www.womansdivorce.com/disability-pay.html
NOTE: I realize that this answer may not be entirely to your liking, and I regret being the bearer of information that you really don’t want to hear. But it would be unfair to you and unprofessional of me were I to provide you with anything less than truthful and honest information. I hope you understand.
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