While every New Jersey divorce is unique, there are certain commonalities that will always need to be addressed, as relevant: child custody, child support, spousal support, and equitable division of assets and debts. These issues can be complex and stressful for all. When at least one spouse is in the military, however, the parties face additional hurdles. In this post, we focus on military pensions.

THE UNIFORMED SERVICES FORMER SPOUSES PROTECTION ACT (USFSPA): WHAT DOES IT DO?

A military divorce is subject to the Uniformed Services Former Spouses Protection Act. The USFSPA provides guidance on military pay and pension matters, including their treatment in divorce.

The USFSPA directs divorcing couples to state statutes regarding child support and spousal support, and permits states to treat military retired pay as divisible spousal property. In addition to receiving alimony and child support, a military spouse (the one who is NOT in the military) may also secure a portion of the service member’s retired pay as a part of the divorce case.

Under the USFSPA, state courts have power to award a military pension to the service member or divide it between the spouses. If the court awards the pension entirely to the service member, then it may compensate the military spouse from other marital assets.

“HOW DO WE DIVIDE A MILITARY PENSION?”

If you’re the spouse of a service member, you should address pension issues during the divorce, and not after it, even if retirement is not immediately anticipated. You will need a court order that divides the military pension.

You should begin by asking the service member about the pension. Get as much information as possible. Get a lawyer’s help early in the process to make sure you are on the right pathway to valuation and eventual distribution.

You should request an order dividing the military pension. There are two ways to get a court order. First, the parties may enter a written agreement about division and distribution. This order must be approved by the court before it is filed. Second, you could have a hearing on the issue as part of your divorce trial.

A common method of pension division is to award the military spouse a percentage of the pension as it is received after retirement. Another permitted method, although less common, is the court’s award to the military spouse of a fixed dollar amount, also received upon retirement of the service member.

A third option, which avoids dividing the pension, involves the non-military spouse’s agreement to receive cash or other assets in exchange for his or her share of the pension. To do this correctly, you will need an actuarial appraisal to determine present value. This is not as hard as it sounds, and the cost is modest. Using military mortality tables and other presumptions to estimate what the member is likely to receive over his or her lifetime, the appraiser determines present value. The service member would have to have sufficient other assets, from joint property or elsewhere, to pay off 50% of the asset’s present value. Sometimes that is a challenge.

“WHAT HAPPENS AFTER I HAVE A COURT ORDER DIVIDING THE MILITARY PENSION?”

Once you have the court’s order dividing the pension, your attorney will send a copy of it to the Defense Finance and Accounting Service (DFAS), federal office responsible to pay retirement benefits. This puts DFAS on notice of your right to collect a portion of the military pension.

As the military spouse, or former spouse, you may be entitled to receive court-ordered pension payments directly from DFAS. You must meet all of the following requirements:

• the divorce judgment and any separate order dividing the military pension are both final (i.e., the time to file an appeal has expired);

• the service member is retired or in the process of retiring; and

• the “10/10” rule has been met, that is, the service member has served at least 10 years in the military, and the parties were married for at least10 years during the military member’s service.

The USFSPA limits the total amount DFAS can pay, per court orders. DFAS can’t pay you more than 50% of the service member’s disposable retired pay. If DFAS receives more than one court order, whether an additional order for child support from you, or an additional order for child support for the child from another relationship, DFAS must not distribute more than 65% of the member’s disposable retired pay for the combined orders. When the DFAS receives multiple orders, it pays them on a first in time basis.

If you do not qualify for direct pay, then consider asking for cash or other marital assets in exchange for your share of the military pension. To be effective, this agreement must become part of the final settlement and any final judgment of divorce. Your lawyer will help you sort this out.

CONCLUSION

As with any family law matter, those going through military divorce deserve the best possible advocacy and outcome. To reach that goal, you should work with a Certified Family Law Specialist, someone you can trust. To learn how we may be of assistance to you, please see our website, write us, or call. We are here to help you.