Military Law
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Answered in 1 hour by:
2/25/2010
Lawrence D. Gorin, Lawyer
Category: Military Law
Satisfied Customers: 1,544
Experience: Military & Family Law. 30+ years experience. USFSPA pension division expertise.
VerifiedYOUR QUESTION:
If a spouse of a retired military person is requesting divorce, are they entitled to a portion of the retirement income? If that person should remarry later, would they lose that income?
ANSWER:
As a general rule, and in the absence of substantial reasons for not doing so, a retired servicemember’s entitlement to disposable retired pay, to the extent the entitlement was acquired during the years of marriage, is deemed and treated as “marital property” and, as such, the retiree’s spouse, upon divorce, is usually “awarded” one-half (50%) of the “marital portion.” The “marital portion” is that portion of disposable retired pay that is attributable to the years of marriage.
Standard methodology is to determine the percentage by used on a formula, expressed in terms of a marital fraction, where the numerator covers the PERIOD OF TIME DURING THE PARTIES’ MARRIAGE while the member was performing creditable military service, and the denominator covers the member’s total period of creditable military service. The former spouse’s award is usually calculated and determined by multiplying the marital fraction by one-half (i.e., 50%), with the resulting product being the percentage share that is awarded to the former spouse by terms of the divorce judgment..
There is no magic language required to express a percentage award of this nature. All the divorce decree needs to say is the following: “THE FORMER SPOUSE IS HEREBY AWARDED ______ PERCENT OF THE RETIRED MILITARY SERVICEMEMBER’S DISPOSABLE RETIRED PAY, AS DEFINED IN 10 USC § 1408(a)(4)”
http://www4.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00001408----000-.html
If the marriage was for at least 10 years, and at least 10 years of the marriage coincided with 10 years of active duty service (thereby meeting the “10-10 rule”), the former spouse would be eligible (if she wished to do so, and most do) to receive her court-awarded share of the retiree’s disposable retired pay by direct payment from DFAS. To get this done, a separate special type of court order is usually prepared and signed by the judge at the same time as the divorce judgment or shortly thereafter, known as a “Court Order for Division of Military Disposable Retired Pay.” (The type of order is not the same as a Qualified Domestic Relations Order as usually used for division of private-sector civilian pension plans, but is somewhat similar, so it is often referred to as a “military QDRO.”)
If the “10-10 rule” is not met (of if the spouse does not want to receive her court-awarded share of the retiree’s disposable retired pay by direct payment from DFAS), there would be no need for a “military QDRO.” Instead, the former spouse would have to look to (and depend on) the retiree to send her a check each month for the portion of disposable retired pay to which she is entitled per the terms of the divorce judgment or decree. And the retiree would be legally obligated to make the payment since it is legally her money that is involved, per the “award” made by the divorce judgment.
To the extent the retiree make payments directly to the former spouse of her court-awarded share of disposable retired pay. the retiree can then claim the money paid to her as tax deductible “alimony” on his federal income tax return, even though the payments are not considered, deemed or treated as alimony (or spousal support) for state divorce law purposes. At least unless the wording of the divorce decree clearly and explicitly declares that the payments are not to be deductible by the payor and includible in the gross income of the payee. This is pursuant to a US Tax Court decision in 2007 that closely examined this question and concluded that such payments satisfied the Internal Revenue Tax Code’s requirements for “alimony” per 26 USC § 71 and, as such, were deemed as legally deductible for the retiree. According to the US Tax Court, whether the payments from the retiree to the former spouse qualify as tax deductible alimony for federal income tax purposes is controlled by the applicable federal tax law, irrespective of any “label” given to the payments by the divorce decree (unless there is a “clear, explicit and express direction” in the divorce decree stating that the payment is not to be treated as alimony). The Tax Court case is PROCTOR v. COMMISSIONER, 129 TC No. 12 (10/10/2007).
http://scholar.google.com/scholar_case?case=15115976290182917722
http://www.ustaxcourt.gov/InOpHistoric/pro5ctor.TC.WPD.pdf
Given that the military disposable retired pay is treated as a PROPERTY ASSET of the marriage (much like money in the bank), the share thereof awarded by the court to the former spouse does NOT end upon the former spouse’s remarriage. (Think of it this way: If during the marriage husband had accumulated $10,000 in a bank account under his name alone, the divorce court most likely would treat it as a marital asset and award wife 50% ($5,000) of the $10,000. There would generally be no requirement that she return her $5,000 to husband in the event she remarries.)
In addition to dividing the disposable retired pay, provision in the divorce judgment is also made requirement the servicemember (or retiree) to “elect” former spouse SBP coverage. This is accomplished by the inclusion in the divorce judgment of specific language. For example:
In addition to the portion of husband’s military disposable retired pay herein awarded to wife, husband is hereby ordered and directed to elect participation under 10 USC § 1448 et seq in the Survivor Benefit Plan (SBP) and, if applicable, the Reserve Component Survivor Benefit Plan (RCSBP), doing so at the earliest opportunity allowed by law, and shall designate wife as his SBP beneficiary for a former spouse survivor annuity commencing on the day after husband’s death in accord with 10 USC § 1448(e)(1), using the full amount of husband’s monthly military retired pay as the base amount for SBP/RCSBP participation, and husband is directed to not amend or terminate the election without the permission of the court.
The SBP coverage provides a monthly annuity for the former spouse in the evenr of the retiree’s death, effectively allowing her to continue to receive a reduced benefit (usually 55% of what she had been receiving prior to former husband’s death) for the balance of her life. The SBP arrangement, in the context of a divorce, is the functional equivalent of a Qualified Joint and Survivor Annuity (QJSA) that is commonly mandated by divorce courts when dividing private-sector pension plans that are subject to the federal Employee Retirement Income Security Act (ERISA). In essence, under a QJSA, retirement payments are made monthly to the retiree for his lifetime and then, after the retiree’s death, monthly payments are made to the retiree’s surviving spouse in an amount that is at least one half of the retirement benefit that was being paid to the retiree. (Note: If a retiree’s former spouse remarries prior to age 55, the former spouse will not be eligible for SBP payments.)
I find it most interesting that family law lawyers representing plan participants, when dealing with the division of a defined benefit plan upon divorce, routinely accept the provision for a QJSA (qualified joint survivor annuity) as a matter of course, without giving it argument at all. But when dealing with the military pension, all hell breaks loose when it comes to SBP coverage, with husband and his attorney steadfastly refusing to allow it, or at least to not permit the cost to be shared.
If either spouse in a divorce proceeding has the existing or possible future right to military disposable retired pay, it is strongly suggested the both spouses confer with lawyers who are knowledgeable and conversant with military law as it applies to divorce law. A lawyer who does not have a full understanding of SBP should NEVER represent a military spouse. And lawyers representing military servicemember’s spouse should ALWAYS insist on SBP coverage. If husband and his attorney resist, then take it to court. Except in unusual situations, divorce court judges will almost invariably order SBP coverage (or order that life insurance be obtained and maintained in lieu of the SBP coverage). From the spouse’s view, this is a non-negotiable issue.
IGNORANCE OF THE SBP (SURVIVOR BENEFIT PLAN) CAN BE COSTLY. Either the attorney for the former spouse doesn’t know about this survivor annuity, or there’s only an agreement (instead of a court order), or else the order providing for SBP coverage is never sent to DFAS. Any of these errors is huge and costly.
http://www.abanet.org/family/military/militarydivorce_errors.pdf
FINALLY, here are some websites that will give you far more information than I can provide in this limited space. Be sure to look at each one of them (and hopefully all of the URLs work).....
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
Dividing Military Retired Pay (from DFAS)
http://www.dfas.mil/garnishment/retiredmilitary/speech8.pdf
Higdon on Military Retirement Divorce
http://www.texasfamilylawinfo.com/docs/Higdon-Military_Retirement_Divorce.pdf
The “Silent Partner” series at the ABA website:
http://www.abanet.org/family/military/silent/mpd_scoutingterrain.pdf
http://www.abanet.org/family/military/silent/mpd_servicemember.pdf
http://www.abanet.org/family/military/silent/mpd_spouse.pdf
http://www.abanet.org/family/military/silent/pension_division.pdf
http://www.abanet.org/family/military/silent/mpd_crdp_crsc.pdf
http://www.abanet.org/family/military/militarydivorce_errors.pdf
The Uniformed Services Former Spouses’ Protection Act (USFSPA) is codified in the United States Code (USC) as 10 USC § 1408. Verbatim text of the entire federal statute is online at:
http://www.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00001408----000-.html
http://www.militarydivorceonline.com/section1408.html
http://supportavet.us/usfspa.html
http://law.justia.com/us/codes/title10/10usc1408.html
And still more....
http://www.dfas.mil/militarypay/garnishment/fs-qa.html
http://www.dfas.mil/militarypay/garnishment/fsfact.html
http://www.dfas.mil/garnishment/retiredmilitary.html
http://usmilitary.about.com/cs/generalpay/a/retirementpay_2.htm
http://usmilitary.about.com/?once=true&
http://www.military.com/benefits/legal-matters/usfpa-overview
OK. That’s all I can offer for now. I wish you well, and I thank you for allowing me to answer your questions.
================================
If your question has been satisfactorily answered, please acknowledge by clicking the green “ACCEPT” button in the upper right hand corner of your screen. After you have accepted, your question will remain open for further dialogue if needed to clarify or elaborate. Also, your positive FEEDBACK comments are important, so please be sure to add a few words as requested. And I thank you in advance. http://ldgorin.justia.net/index.html
P.S. -- If you have future questions that you would like me in particular to answer, just begin your question with “FOR MR. GORIN --” or ask your question through my profile at:
http://www.justanswer.com/profile.aspx?PF=8848811&FID=0
If a spouse of a retired military person is requesting divorce, are they entitled to a portion of the retirement income? If that person should remarry later, would they lose that income?
ANSWER:
As a general rule, and in the absence of substantial reasons for not doing so, a retired servicemember’s entitlement to disposable retired pay, to the extent the entitlement was acquired during the years of marriage, is deemed and treated as “marital property” and, as such, the retiree’s spouse, upon divorce, is usually “awarded” one-half (50%) of the “marital portion.” The “marital portion” is that portion of disposable retired pay that is attributable to the years of marriage.
Standard methodology is to determine the percentage by used on a formula, expressed in terms of a marital fraction, where the numerator covers the PERIOD OF TIME DURING THE PARTIES’ MARRIAGE while the member was performing creditable military service, and the denominator covers the member’s total period of creditable military service. The former spouse’s award is usually calculated and determined by multiplying the marital fraction by one-half (i.e., 50%), with the resulting product being the percentage share that is awarded to the former spouse by terms of the divorce judgment..
There is no magic language required to express a percentage award of this nature. All the divorce decree needs to say is the following: “THE FORMER SPOUSE IS HEREBY AWARDED ______ PERCENT OF THE RETIRED MILITARY SERVICEMEMBER’S DISPOSABLE RETIRED PAY, AS DEFINED IN 10 USC § 1408(a)(4)”
http://www4.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00001408----000-.html
If the marriage was for at least 10 years, and at least 10 years of the marriage coincided with 10 years of active duty service (thereby meeting the “10-10 rule”), the former spouse would be eligible (if she wished to do so, and most do) to receive her court-awarded share of the retiree’s disposable retired pay by direct payment from DFAS. To get this done, a separate special type of court order is usually prepared and signed by the judge at the same time as the divorce judgment or shortly thereafter, known as a “Court Order for Division of Military Disposable Retired Pay.” (The type of order is not the same as a Qualified Domestic Relations Order as usually used for division of private-sector civilian pension plans, but is somewhat similar, so it is often referred to as a “military QDRO.”)
If the “10-10 rule” is not met (of if the spouse does not want to receive her court-awarded share of the retiree’s disposable retired pay by direct payment from DFAS), there would be no need for a “military QDRO.” Instead, the former spouse would have to look to (and depend on) the retiree to send her a check each month for the portion of disposable retired pay to which she is entitled per the terms of the divorce judgment or decree. And the retiree would be legally obligated to make the payment since it is legally her money that is involved, per the “award” made by the divorce judgment.
To the extent the retiree make payments directly to the former spouse of her court-awarded share of disposable retired pay. the retiree can then claim the money paid to her as tax deductible “alimony” on his federal income tax return, even though the payments are not considered, deemed or treated as alimony (or spousal support) for state divorce law purposes. At least unless the wording of the divorce decree clearly and explicitly declares that the payments are not to be deductible by the payor and includible in the gross income of the payee. This is pursuant to a US Tax Court decision in 2007 that closely examined this question and concluded that such payments satisfied the Internal Revenue Tax Code’s requirements for “alimony” per 26 USC § 71 and, as such, were deemed as legally deductible for the retiree. According to the US Tax Court, whether the payments from the retiree to the former spouse qualify as tax deductible alimony for federal income tax purposes is controlled by the applicable federal tax law, irrespective of any “label” given to the payments by the divorce decree (unless there is a “clear, explicit and express direction” in the divorce decree stating that the payment is not to be treated as alimony). The Tax Court case is PROCTOR v. COMMISSIONER, 129 TC No. 12 (10/10/2007).
http://scholar.google.com/scholar_case?case=15115976290182917722
http://www.ustaxcourt.gov/InOpHistoric/pro5ctor.TC.WPD.pdf
Given that the military disposable retired pay is treated as a PROPERTY ASSET of the marriage (much like money in the bank), the share thereof awarded by the court to the former spouse does NOT end upon the former spouse’s remarriage. (Think of it this way: If during the marriage husband had accumulated $10,000 in a bank account under his name alone, the divorce court most likely would treat it as a marital asset and award wife 50% ($5,000) of the $10,000. There would generally be no requirement that she return her $5,000 to husband in the event she remarries.)
In addition to dividing the disposable retired pay, provision in the divorce judgment is also made requirement the servicemember (or retiree) to “elect” former spouse SBP coverage. This is accomplished by the inclusion in the divorce judgment of specific language. For example:
In addition to the portion of husband’s military disposable retired pay herein awarded to wife, husband is hereby ordered and directed to elect participation under 10 USC § 1448 et seq in the Survivor Benefit Plan (SBP) and, if applicable, the Reserve Component Survivor Benefit Plan (RCSBP), doing so at the earliest opportunity allowed by law, and shall designate wife as his SBP beneficiary for a former spouse survivor annuity commencing on the day after husband’s death in accord with 10 USC § 1448(e)(1), using the full amount of husband’s monthly military retired pay as the base amount for SBP/RCSBP participation, and husband is directed to not amend or terminate the election without the permission of the court.
The SBP coverage provides a monthly annuity for the former spouse in the evenr of the retiree’s death, effectively allowing her to continue to receive a reduced benefit (usually 55% of what she had been receiving prior to former husband’s death) for the balance of her life. The SBP arrangement, in the context of a divorce, is the functional equivalent of a Qualified Joint and Survivor Annuity (QJSA) that is commonly mandated by divorce courts when dividing private-sector pension plans that are subject to the federal Employee Retirement Income Security Act (ERISA). In essence, under a QJSA, retirement payments are made monthly to the retiree for his lifetime and then, after the retiree’s death, monthly payments are made to the retiree’s surviving spouse in an amount that is at least one half of the retirement benefit that was being paid to the retiree. (Note: If a retiree’s former spouse remarries prior to age 55, the former spouse will not be eligible for SBP payments.)
I find it most interesting that family law lawyers representing plan participants, when dealing with the division of a defined benefit plan upon divorce, routinely accept the provision for a QJSA (qualified joint survivor annuity) as a matter of course, without giving it argument at all. But when dealing with the military pension, all hell breaks loose when it comes to SBP coverage, with husband and his attorney steadfastly refusing to allow it, or at least to not permit the cost to be shared.
If either spouse in a divorce proceeding has the existing or possible future right to military disposable retired pay, it is strongly suggested the both spouses confer with lawyers who are knowledgeable and conversant with military law as it applies to divorce law. A lawyer who does not have a full understanding of SBP should NEVER represent a military spouse. And lawyers representing military servicemember’s spouse should ALWAYS insist on SBP coverage. If husband and his attorney resist, then take it to court. Except in unusual situations, divorce court judges will almost invariably order SBP coverage (or order that life insurance be obtained and maintained in lieu of the SBP coverage). From the spouse’s view, this is a non-negotiable issue.
IGNORANCE OF THE SBP (SURVIVOR BENEFIT PLAN) CAN BE COSTLY. Either the attorney for the former spouse doesn’t know about this survivor annuity, or there’s only an agreement (instead of a court order), or else the order providing for SBP coverage is never sent to DFAS. Any of these errors is huge and costly.
http://www.abanet.org/family/military/militarydivorce_errors.pdf
FINALLY, here are some websites that will give you far more information than I can provide in this limited space. Be sure to look at each one of them (and hopefully all of the URLs work).....
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
Dividing Military Retired Pay (from DFAS)
http://www.dfas.mil/garnishment/retiredmilitary/speech8.pdf
Higdon on Military Retirement Divorce
http://www.texasfamilylawinfo.com/docs/Higdon-Military_Retirement_Divorce.pdf
The “Silent Partner” series at the ABA website:
http://www.abanet.org/family/military/silent/mpd_scoutingterrain.pdf
http://www.abanet.org/family/military/silent/mpd_servicemember.pdf
http://www.abanet.org/family/military/silent/mpd_spouse.pdf
http://www.abanet.org/family/military/silent/pension_division.pdf
http://www.abanet.org/family/military/silent/mpd_crdp_crsc.pdf
http://www.abanet.org/family/military/militarydivorce_errors.pdf
The Uniformed Services Former Spouses’ Protection Act (USFSPA) is codified in the United States Code (USC) as 10 USC § 1408. Verbatim text of the entire federal statute is online at:
http://www.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00001408----000-.html
http://www.militarydivorceonline.com/section1408.html
http://supportavet.us/usfspa.html
http://law.justia.com/us/codes/title10/10usc1408.html
And still more....
http://www.dfas.mil/militarypay/garnishment/fs-qa.html
http://www.dfas.mil/militarypay/garnishment/fsfact.html
http://www.dfas.mil/garnishment/retiredmilitary.html
http://usmilitary.about.com/cs/generalpay/a/retirementpay_2.htm
http://usmilitary.about.com/?once=true&
http://www.military.com/benefits/legal-matters/usfpa-overview
OK. That’s all I can offer for now. I wish you well, and I thank you for allowing me to answer your questions.
================================
If your question has been satisfactorily answered, please acknowledge by clicking the green “ACCEPT” button in the upper right hand corner of your screen. After you have accepted, your question will remain open for further dialogue if needed to clarify or elaborate. Also, your positive FEEDBACK comments are important, so please be sure to add a few words as requested. And I thank you in advance. http://ldgorin.justia.net/index.html
P.S. -- If you have future questions that you would like me in particular to answer, just begin your question with “FOR MR. GORIN --” or ask your question through my profile at:
http://www.justanswer.com/profile.aspx?PF=8848811&FID=0
Lawrence D. Gorin, Lawyer
Category: Military Law
Satisfied Customers: 1,544
Experience: Military & Family Law. 30+ years experience. USFSPA pension division expertise.
VerifiedLawrence D. Gorin and 87 other Military Law Specialists are ready to help you
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It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.
Apopka, FL
Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.
Freshfield, Liverpool, UK
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