INTRODUCTION: The Legal Eagle is a series of info-letters to help service personnel, retirees, and family members with frequently asked questions on issues involving military divorce, pension division, the Survivor Benefit Plan, and other topics. It is, of course, very general in nature since no handout can answer your specific questions. Comments, corrections and suggestions regarding this pamphlet should be sent to the address at the end of the last page.

Introduction

Often the spouse or former spouse in a military divorce case needs a little extra help. After all, the servicemember (SM) or retiree usually has most of the knowledge and data regarding military service (whether on active duty or in the National Guard or Reserves). So this Legal Eagle info-letter has condensed the critical advice for a former spouse (FS) into a checklist of TEN TIPS.

Dividing the Pension

#1. Fact: The usual way to divide a military pension in most states is with a percentage or a formula. Thus, the divorce settlement agreement for Sergeant John Doe might say, “Jane Doe, the wife, is entitled to 50% of the marital share of John Doe’s Army pension, and the marital share is 12 years of marital pension service divided by his total service at retirement.” It could also say: “John Doe will pay Jane Doe, his former wife, one-half of the marital share of John Doe’s Army pension, with the marital share being 12 years of marital pension service divided by 20 years of military service at divorce, or 60%.”

The retired pay center[1] will also accept a pension division award expressed as a fixed dollar amount, but it is a bad deal for the former spouse (FS). That’s because it isn’t increased annually by whatever COLA[2] the government applies to retired pay. In most years, the COLA is between 1% and 3%, and it is applied automatically to percentage clauses and formula awards, shown in the above paragraph. But a fixed dollar amount doesn’t qualify. So if the pension clause says, “John Doe will pay Jane Doe $600 per month as her share of his military pension,” she loses out on the yearly adjustment for inflation.

CHECK – Make sure the pension clause in the court order or settlement divides the pension with a percentage or a formula. A fixed dollar amount will not increase over the years for inflation through a COLA.

#2. Fact: It can take up to 90 days for the retired pay center to process the military pension division order (MPDO) once it’s submitted. Whether the servicemember is already retired or just serving time until retirement, it’s clear that there could be a problem with the monthly pension-share payments. Is there a requirement in the MPDO that the SM, John Doe, must make these interim payments to the former spouse, Jane Doe? Is it in the order? Specify HOW the payments are to be made, and WHEN they are due. When deciding on deadlines, remember that military retired pay is disbursed on the last day of the month.

CHECK – Make sure that your court order for division of military retired pay states that the servicemember/retiree must make the interim payments in the 90-day period in which the retired pay center is processing the order.

#3. Fact: It’s always better to get monthly payments from the divided pension through a garnishment from the retired pay center, rather than relying on one’s ex-spouse to write a check every month. Garnishment payments are governed by the 10/10 Rule which states that the retired pay center must determine that there are ten years of military service concurrent with ten years of military service creditable toward retirement before it can start a property-division garnishment regarding the military pension.

It is important to know that the ten years of marriage doesn’t stop at the date of filing, date of irretrievable breakdown or date of separation. Divorce is what ends the marriage for the purposes of the 10/10 Rule.

In Guard/Reserve cases, ten years of service means ten years during the marriage during which the SM acquired at least 50 points per year. In a retirement from active duty (called a “regular retirement”), there must be ten years of active duty overlapping ten years of the marriage.

CHECK – If at all possible, make sure that you do not get a divorce before the terms of the 10/10 Rule are met. It’s worth waiting. Talk to your lawyer about how to delay the divorce.

#4. Fact: Disability payments from the VA (“disability compensation”) can reduce the amount of retired pay that is divisible with the FS, while at the same time increasing the amount of money that the retiree receives, since these payments are tax-free and can be as high as $3300 a month or more (100% disability rating from the Department of Veterans Affairs). Talk to your lawyer about an indemnification clause for the settlement or MPDO which would require the retiree to compensate or reimburse you for any money lost due to the election of VA disability pay.

CHECK - Be sure that your settlement includes a clause such as this: “If Jane Doe’s payments are reduced for any reason (such as military disability retired pay, VA disability compensation, or Combat-Related Special Compensation), then John Doe, the plaintiff, will promptly reimburse and compensate Jane Doe for the amount of the reduction.”

#5. Fact: Nothing in federal law requires that pension-share payments stop if the FS remarries or cohabits. Sometimes this is a term which the SM/retiree tries to insert into the settlement. Watch out for this.

CHECK - Be sure that the divorce settlement doesn’t contain a provision that ends pension division payments upon remarriage or cohabitation.

#6. Fact: Sometimes the FS wants to be able to see the amount of retired pay, to be sure that she or he is receiving the right amount of the pension. DFAS provides for viewer access to the retiree’s account by means of a Limited Access Password, so that a current or former spouse, for example, can view what is there (without being able to make any changes). This is a useful way of “keeping everyone honest.” More information on the Limited Access Password is available at the DFAS website, https://www.dfas.mil.

CHECK - Some attorneys like to include a clause in the military pension division order that states:

Upon the member’s retirement, the former spouse, Jane Doe, will be given a Limited Access Password which she can use to access the myPay system through the DFAS website and verify that she is, in fact, receiving her full share of the military retired pay each month. Upon the start of retired pay, the servicemember will set up access for her to https://myPay.dfas.mil, and will provide the Limited Access Password to her.

Survivor Benefit Plan

#7. Fact: What if the servicemember or retiree dies before the former spouse? “When the servicemember dies, the pension dies” is the rule. The pension stops upon John Doe’s death. That means that Jane’s share of the pension stops then as well. Unless there is a court order requiring Survivor Benefit Plan coverage for Jane, she may be faced with a financial hardship upon the death of her ex-husband.

The way to ensure that there is a continued flow of income is to obtain former-spouse Survivor Benefit Plan (SBP) coverage. The government will pay Jane, as the former spouse, 55% of the SBP base amount (which is usually the entire pension) for the rest of her life if a valid court order for former-spouse SBP coverage is submitted within the deadlines (see below) to the retired pay center. The payments are adjusted annually for inflation with COLAs, and they are taxable income. Jane cannot outlive them; if she’s 102 years old, she’ll still be getting SBP payments deposited into her bank account.

CHECK – Be sure that the order or the settlement incorporated into the divorce decree states: “John Doe, the plaintiff, will immediately elect Jane Doe, the defendant, for former-spouse coverage under the Survivor Benefit Plan,” or words to that effect.

#8. Fact: There is a remarriage penalty for SBP. If the FS remarries before age 55, her or his eligibility for payments upon the death of the SM/retiree will be suspended, and premium payments for SBP will stop. The suspension will be lifted if the new spouse dies or the marriage ends with divorce or annulment.

CHECK – Be sure to consider the “remarriage penalty” if you decide to remarry before age 55, and notify the retired pay center if this occurs.

#9. Fact: There are deadlines for locking in SBP coverage for a former spouse. The SM must submit the election form, DD Form 2656-1, to the government (addresses shown on the form) within one year of the divorce. The FS must send the “deemed election” form, DD Form 2656-10, to the government within one year of the first order granting former-spouse SBP coverage. Sometimes the start date is the same for both of these, since the divorce decree often incorporates a settlement or separation agreement which contains a clause mandating SBP for the former spouse.

CHECK – Be sure to mark the deadlines on your calendar, and make sure that your lawyer knows about the deadlines as well, in case further assistance is needed.

Finding a Lawyer

#10. Fact: Finding a good lawyer for a military divorce case can be a challenge. Even if the FS has a qualified family law attorney, she or he will also need a specialist in military divorce issues to act as an advisor or “co-pilot” in some cases. Sometimes the advisor is a Reservist or a lawyer who served at one time in the military. Sometimes it’s a military retiree who used to be a JAG officer, that is, a lawyer in the Judge Advocate General’s Corps. As Tom Cruise learned in “Top Gun,” never leave your “wingman” behind. The specialist can solve a lot of problems which come up in military divorce cases; it’s usually worth the investment.

CHECK - “How to Find a Military Divorce Attorney” and “You and Your Lawyer” can help in your search. These Legal Eagle info-letters are at www.nclamp.gov > Publications > Legal Eagle.

Q. If I have other questions, what should I do?

A. See a military legal assistance attorney or private attorney as soon as possible. Your lawyer can answer many questions and help you to make a fair and intelligent decision about your choices, options and alternatives.

[Rev. 3/18/2021]

The LEGAL EAGLE series of client handouts is prepared by Mark E. Sullivan, a retired Army Reserve JAG colonel and the author of The Military Divorce Handbook (Am. Bar Assn., 3^rd Ed. 2019). For revisions, comments or corrections, contact him at mark.sullivan@ncfamilylaw.com.