Dividing Military Retired Pay in Divorce

When a military member and their spouse divorce, one important objective is to divide military retirement benefits in a manner that recognizes the contributions and sacrifices of both parties during the marriage. Yet achieving that objective can be extremely complicated, and a decision of the US. Supreme Court just made it more so.

An illustration of why this subject matter is so complicated involves:

1. The distinction between retired pay versus disability pay
2. The applicability of both federal and state law to military divorces
3. The relationship between the timing of the divorce and the retirement of the military member

Consider this worst-case scenario for the spouse: The parties divorce while the member is still in the military, and the parties enter into an Agreement, or a state divorce court enters an order that the spouse will receive 50% of the military retired pay. But then at the time of retirement, the member waives a portion of that pay and instead receives disability pay. Because federal law says that only the military retired pay can be divided with a spouse in divorce, the spouse does not receive the benefit that was bargained for.

One approach that’s been used in the past has been to include language in the parties’ Agreement or the court order that the military member won’t waive a portion of the retired pay in order to receive disability payments or that the military member will indemnify the divorced spouse for any loss created by a waiver. But in the Howell v. Howell case, the U.S. Supreme Court held that the military member cannot be forced to indemnify the divorced spouse for this loss.

So, what’s the spouse to do? A state divorce court can still “make the spouse whole” through an award of alimony or perhaps an award of other assets. Or the parties could make a similar provision in their Agreement. But now care will need to be taken to reserve jurisdiction for such a remedy in the future if the member is not already retired at the time of the divorce.

For all of these reasons and more, it’s critical to seek advice from an experienced family law attorney if your divorce is a military divorce so that you can properly prepare for these and other contingencies that may arise long after your divorce is over.

Emily C. Baker is a family law attorney and partner at Tucker PLLC.  For more information on how to navigate your unique situation in divorce, contact Emily at ebaker@tuckerfamilylaw.com or request a consultation.