Military Divorces & the Tactical Division of Assets and Military Benefits

• Why rules for military divorces differ from non-military divorces.
• Can you even divorce an active member of the military?
• Understanding how military benefits can change based on deployments, base transfers, and combat orders.
• When military pensions can be divided in a divorce – and when they can’t.
• The importance of knowing the various elements of a service member’s pay.
• Benefits that are unique to military spouses and children and can be continued after a divorce.
• ...and much more!

If you would like to speak with one of our family law attorneys, please call our office at (503) 227-0200 or visit our website at https://www.landerholmlaw.com/

Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.

Steve Altishin 11:40
So I know in some regular civilian pension plans or retirement benefits, there is kind of a two step process where the judge says, Okay, you're going to get X amount, and then Y is it goes to the person who's running the retirement account, what they call the plan administrator. And the plan administrator has to actually agree to that for them to pay. And is that sort of the the same way it's working in the military, where it's a matter of to get the military to pay, you have to go through all these extra hoops?

Robert Howell 12:10
Exactly. The Defense Finance and Accounting Service, DFAS, is the plan administrator for military pensions. And they are extremely particular about the wording that has to be used in orders dividing military retirement. If the wording is wrong, or if something is left out, they will reject the order and send it back. So attorneys have to be very careful to make sure the order complies with all federal requirements and DFAS regulations.

Steve Altishin 12:43
So if somebody just goes online and downloads a form or tries to write something themselves, there’s a pretty good chance it may not work?

Robert Howell 12:53
Absolutely. And unfortunately, a lot of people don’t realize that until years later when the military member retires and the former spouse is expecting to receive a payment and DFAS rejects the order because it wasn’t done correctly. At that point, sometimes the parties have to go back to court years later to fix it.

Steve Altishin 13:19
That sounds like a nightmare.

Robert Howell 13:22
It can be. And sometimes the military member may have remarried, moved somewhere else, retired, or even become disabled. Then you’re trying to reconstruct something years after the fact. So it’s really important to get it right the first time.

Steve Altishin 13:40
Let’s talk a little bit about disability because I know that comes up in military divorces a lot. Are disability benefits treated differently than retirement benefits?

Robert Howell 13:54
Yes. Disability benefits are treated very differently. VA disability compensation generally is not divisible as property in a divorce. And sometimes what happens is that a military member may waive a portion of their retirement pay in order to receive disability compensation because disability compensation is tax free. That can create major issues for the former spouse because now the retirement amount that was supposed to be divided becomes smaller.

Steve Altishin 14:31
So even after the divorce, something can happen that changes what the former spouse receives?

Robert Howell 14:40
Exactly. And that’s one of the things attorneys have to think about ahead of time when drafting orders and settlement agreements. There may need to be indemnification clauses or other protections built in so that one party isn’t unfairly harmed later.

Steve Altishin 14:58
That’s something I don’t think most people would even know to ask about.

Robert Howell 15:03
Most people don’t. Military pay is complicated. You don’t just have base pay. There are housing allowances, combat pay, hazardous duty pay, food allowances, specialty pay, deployment pay—there are all sorts of different components. Some are taxable, some are not, and some may come and go depending on where the service member is stationed or deployed.

Steve Altishin 15:31
And I imagine that affects support calculations too.

Robert Howell 15:36
Absolutely. When you’re calculating child support or spousal support, you have to understand what portions of the military member’s compensation are regular and continuing and what portions are temporary. Somebody deployed in a combat zone may suddenly look like they’re making substantially more money than they normally do because of combat pay and allowances, but those benefits may disappear when the deployment ends.

Steve Altishin 16:07
That could create a huge problem if somebody assumes that income level is permanent.

Robert Howell 16:13
Exactly. And military families also deal with constant relocation. Somebody may receive one housing allowance while stationed in Seattle and a completely different one if transferred somewhere else. So you have to look carefully at what the actual long term income picture is likely to be.

Steve Altishin 16:35
We talked a little earlier about benefits for spouses and children. Are there some benefits that military spouses can continue receiving after a divorce?

Robert Howell 16:47
Yes. There are certain benefits available depending on the length of the marriage and the overlap with military service. People often refer to the 20/20/20 rule. That means there were at least 20 years of marriage, 20 years of military service, and 20 years of overlap between the two. If that applies, then the former spouse may continue to receive certain military benefits like commissary privileges, exchange privileges, and medical benefits.

Steve Altishin 17:24
So those overlap requirements become very important.

Robert Howell 17:29
Very important. And there are also partial benefits under what’s commonly called the 20/20/15 rule, where there are 20 years of marriage and service but only 15 years of overlap. In those situations, medical coverage may continue for a limited time.

Steve Altishin 17:52
I imagine that’s something people need to know before finalizing a divorce because timing could matter.

Robert Howell 18:00
Absolutely. Timing can matter tremendously in military divorces. Sometimes waiting a few additional months before finalizing a divorce can dramatically affect eligibility for benefits.

Steve Altishin 18:16
That really drives home why military divorces are so different and why people need somebody who understands the military system.

Robert Howell 18:27
Exactly. Military divorces involve both state family law and federal military regulations. You really have to understand how those systems interact because mistakes can have very long term consequences.

Steve Altishin 18:43
Robert, thank you so much for being here today. This really helps explain why military divorces have so many unique considerations and why it’s important to understand military benefits before making decisions.

Robert Howell 18:58
Thank you very much for having me.

Steve Altishin 19:01
And thank you everyone for joining us today. If anyone has any questions about military divorces or military benefits, feel free to post them here and we can help connect you with Robert. Until next time, stay safe, stay healthy, and we’ll see you next time.

Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Landerholm Family Law and Pacific Cascade Family Law, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at landerholmlaw.com or pacificcascadefamilylaw.com. You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys. Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.

Robert Howell 12:30
That is the biggest question mark, anytime you're trying to attach a retirement or pension and get it paid out to the other party. The military, which is not surprising, is very strict about their format. And if the documents you send them aren't formatted in a particular way, they'll simply reject it, and send it back to you for further modification. Which means you might have to go back to court. And this can go on more than once. So it's very important that you-- a lot of times it helps to contact the defense pay department and get information from their legal services exactly how the wording should be, so that you don't get these rejections and have to go back to court to modify your judgments based on what the military is telling you they'll accept. So it can be a vicious circle for you if you're not really prepared.

Steve Altishin 13:33
When we say the military, is it a Washington DC office that handles every aspect of each military? Or are you looking at, well, maybe it'll be different from an Air Force pension or, you know, Navy pension?

Robert Howell 13:59
No, it's the Defense Department of Pay. That's who you contact, and that's who you work with. So it doesn't matter what branch of the military you're dealing with, you're going to be dealing with the same government entity to get the division.

Steve Altishin 14:16
Is there any limit on how much they'll pay? I suppose you could, if a judge could say just depending on the assets of the divorce, or the needs of each of the people, that you're going to get 90% of this person's IRA. Are there limits in the military to stuff like that?

Robert Howell 14:47
Yeah, the the non-military party to cannot get more than 50%. But there are other ways the court can offset a division that they feel it'd be more equitable. And that could be through spousal support. Or what also happens a lot is retirement benefits get modified, because the military member qualifies for a disability, and the disability reduces their retirement. And then suddenly, the former spouse is getting less money because less money is being paid out from the pension fund. And you then might have to go back. And this is where the real gray areas come in for the court, of how they can fill that gap. If there is a spousal support order, that might be one way that they can do it.

Steve Altishin 15:45
Can you just ask a judge, Washington judge, to say, 'Well, we understand the military is only going to give X percent, but I'm going to order you to pay part of what you receive to your spouse'?

Robert Howell 15:58
I believe, right now, there are a couple cases that have gone through the appellate court. And it's really undecided law as to what authority a civil judge can exercise over the division of the military pay. And a lot of the case law that I'm reading on it is just all over the board as to what they're allowing. And so I think at some point, either our state legislature or the military is going to have to clarify these kinds of questions, because they're just not, there's not the law there for them yet. There are decisions but not law.

Steve Altishin
It sounds like having an attorney who understands the military part of it, is not just essential for getting the VA benefit payment out, but then determining the whole rest of the divorce settlement, because that's going to be potentially, I imagine, a significant part of it.

Robert Howell
Right, and then there's another spin on all of this, which happens to be a case that I just picked up, and that's if the party is already retired, the military party's retired, but the spouse was with him for his entire military career. So she is entitled to part of that pension. But now you're dealing with a pension that's already being paid out to the other party. And so you need a different set of orders. Because you have a pension that's in place, the only thing that really helps is we already know the amount, right? And therefore, it's fairly easy for the judge to order 50%. And there's some debate too, as to whether the order should be a dollar amount or percentage. I myself prefer a percentage, because if the payout to the military person is going to increase over time, because they get a cost of living adjustment every year, and therefore, rather than lock your client into an amount that they get that's kind of gong to be forever, you give them a percentage, so they always will get that 50%, no matter what happens to the pay of the military person.

Steve Altishin 18:31
And so 20 years later, 10 years later, when it starts to payout after a divorce, you don't have to go back, if you do a percentage, to then determine what that dollar amount would be. They would figure that out.

Robert Howell 18:47
Correct. So when the Defense Department gets that kind of order, they're always going to know that they have to update the payments to the other party based on the court order, which is 50%, as opposed to some dollar amount. And as a lawyer, I think that's more of an obligation on our part, to ensure our clients rights are protected over the long term, so we don't wind up going back to court.

Steve Altishin 19:16
Oh, that makes sense. I mean, it's kind of that idea where you're trying to find the future value, and you come into a number, but the number isn't necessarily going to be right, you know?

Robert Howell 19:28
Right. And I know, my own brother who retired from the Air Force as a major. I think he started at, this is 20 years ago, probably $17,000 a year, and now I think it's $31,000 a year that his retirement pays. So that's a significant difference. And you want to make sure if you represent the former spouse that you're protecting their rights, knowing that that's going to be the long term case.

Steve Altishin 19:59
So what happens if you divorce a private or a corporal, and years go by and years go by, and at retirement time, they're now a colonel.Can you go in and change, or do you have to deal with that at the beginning, or how does that work?

Robert Howell 20:18
Again, it depends on the time of divorce. With the new rule, it's time served plus rank. And again, I go back to my brother, my brother was a non-commissioned officer for the first 10 years and then went to OCS and became an officer and retired from the military as a major. So he'd greatly increased his ability on his pension, because the fact that he went from a non-commissioned to a commissioned officer. And so again, to protect the rights of a former spouse, you want to make sure that at the time of divorce, that information is correct when it goes to the Department of Defense.

Steve Altishin 21:00
Wow. So this sort of barrier, 50%, what if you're not the first person to divorce that person? Is that 50% switched? Is it just an overall limit? So that, you know, if someone already has 50%, you can get nothing? How does that work?

Robert Howell 21:22
That's an interesting question. But it's, again, going to depend upon how long the marriage was. Because that also factors into how much of the retirement you're entitled to. If you're there for the entire time, you're going to get that 50%. If you're there in the marriage for only five years, although the state of Washington still allows the division of retirement paid, they're going to base it on that fact that you were only present for five years of this person's service. So you may get 10% of their retirement day, but no matter what, you should never, the federal law really prohibits any taking over 50%. Even if there are multiple parties, the court is going to have to be cognizant of the fact that they still can't take more than 50% of the pay.

Steve Altishin 22:20
If the spouse who is awarded a part of this pay gets remarried, are there issues there? Is it like spousal support or alimony where it could potentially go away?

Robert Howell 22:38
Yeah, that's a very common question. And the answer is no, it never goes away. It is a right to the party that receives it. And their marital status, income changes, anything, does not affect their right to continue to receive that amount for their entire life.

Steve Altishin 22:59
Got it. I believe that there are different things involved in military pay, as well as military retirement benefits, that could go on. As you mentioned, disability, do they all get put together and you get that X amount, 50%? For instance, you said there's a disability potentially, so you're paying some disability, maybe that reduces some of what I guess what you would call your normal retirement. I don't know if there's other kinds of retirement that can go in. How is that all treated?

Robert Howell 23:46
Let's say a veteran gets, the VA determines that he's 30% disabled, and that 30% will come out of their 50% of their retirement, or out of their retirement in total. And that's where the other party is going to get affected. But the benefit, the amount of the benefit or retirement, doesn't change for the service member. But the amount that's coming out of the pension versus the disability is going to change. And again, that's going to affect the rights of the former spouse. And so you might have to go back in for a modification to deal with that issue. The one thing if you ever see a pay stub from the military, it's very unique. Because there are all sorts of allowances they get. The most common and the biggest one is usually a base housing allowance. If the party is not going to live on base, depending upon where they're stationed, the average I've seen is between $1,800-$1,900 a month, which is added to their paycheck. But that doesn't accrue to their military pay/pension. So there are elements that are on their paycheck to which they're getting paid. That's also overseas duty pay, combat pay, all of the those will factor into their retirement. So there's a lot of complexity when looking at how a military person is paid, and what part of that pay is going to accrue to their retirement. And, again, if they got deployed, they got injured, and they're on a disability, they could also get 100% disability, which is a problem, I'm just now coming to realize, because that terminates their retirement, because they're on disability. And if the disability is 100%, that's usually not touchable, in terms of awarding to former spouse, that's going to be problematic. I haven't seen a case yet where that's addressed. So I'm not quite sure how the courts going to deal with it.

Steve Altishin 25:59
Yeah. Generally, I think, the rule is that if you make a property settlement, 'I get the house and you get the bank account,' you can't come in later and modify that. You don't really get two swings at that. But I am wondering if military benefits like this have a little bit of a different view by the court because of just kind of what they are. And like you mentioned, if the military member becomes disabled after the divorce, the pension, which was already decided, goes away or is reduced. Is there a way to modify either in the Washington courts or with the military, any sort of way to to compensate for that?

Robert Howell 26:48
It's going to depend upon the form of the judgment. Normally, when an order is made for the division of a pension, you still have an action that you can come back on. And so if it's modified because of disability, you're able to go back to court and get it modified, or the court can choose to compensate the difference through spousal support. But then there has to be a spousal support order in place. Because normally, once a judgments entered, unless the court retains jurisdiction over spousal support, that's not going to be an issue that you can go back to court for. So it might be incumbent upon any attorney writing a judgement for this as a possibility, to make sure the court retains jurisdiction over spousal support, so that if a modification is needed to go back to court on that issue, that gives the court the authority to modify it and compensate the other party in court.

Steve Altishin 27:51
There are a lot of things that you as an attorney need to know, really especially when you're talking about the military and pensions. Who would have thought, I wouldn't have thought that you may just want to have even a deminimis spousal support, especially if there's an issue that, you know, a person has been hurt, and maybe it'll get worse. I mean, that whole kind of thing, it's all part of finding an attorney who knows how the military works in this stuff.

Robert Howell 28:22
Yeah. And that's what I think, I know some attorneys advertise that they do military divorces, and things like that. And in California, that was part of my advertisement, we say we handle military divorces. And it's because you're dealing with so many unknown factors that can come into play. And when you're writing a judgement, to preserve your own legal elements that will prevent any kind of malpractice coming back on you, you need to be very sure that you've covered all the bases, and try to anticipate what might be an issue in the future. I know the California courts, it's just a checkbox on the Judgment form to retain jurisdiction over spousal support. But I haven't run into that issue with the Washington courts yet, so I'm not sure.

Steve Altishin
Well, I know we're running up towards 30 minutes, but lets talk a little bit about, because that's not the only benefit of the pension that a military member has or the family has, I think everyone gets TRICARE insurance, they get what they call what the ID card. So there are other benefits that flow with being a spouse. Do any of those kind of transfer to a divorced spouse, or can they?

Robert Howell
Anytime you have the former spouse of a retired military person, then that former spouse, and some bases do it differently, but more often than not, if the person put in 20 years, their former spouse is entitled to all the base privileges. They can keep their ID card, which gets you onto the base, you can use the base commissary, you can use the base medical facilities. One of the big reasons that a lot of ex military retire in San Antonio, Texas, is because there are five military installations near San Antonio. And so they can avail themselves of all the privileges they had when they were in the military. And if you have children, the children can retain their IDs until they're 21. And so they can continue to enjoy the the privileges of on base commissary, px and all of that, which, frankly, is pretty significant, because you're not paying taxes for any of those. So it'd be a pretty significant advantage to have that. And certainly, you want to make sure that in a long term marriage that the former spouse is getting those privileges retained.

Steve Altishin 31:25
I'm sorry, do those privileges go away if the spouse gets remarried?

Robert Howell 31:29
No.

Steve Altishin 31:32
So this is a big deal. I mean, medical insurance just by itself is a huge benefit.

Robert Howell 31:38
Exactly. And so, again, I mean, even up here with JBLM, close to Tacoma, it's always going to be a big issue of the parties to keep access to that at that base. And you know, particularly in these kind of crazy economic times, that's a huge benefit to your clients.

Steve Altishin 32:01
Oh, absolutely. Wow, that that is really, really eye opening. Lots of information. I really thank you, and we didn't even touch on child custody, child support, parenting time, what to do with parenting time, assuming a deployment, all of those things. So we're going to have you on again, and I see just by this conversation that even those things sort of become interwoven with the other military benefits. And it's a puzzle, you need to have all the pieces. Wow, thank you Robert so much for being here today. It was really cool.

Robert Howell 32:44
All right. Thank you, I enjoyed it.

Steve Altishin 32:45
Thank you, I did too. And everyone, I just want to thank you for coming again, as always, to our Facebook Live. Anyone with any questions further from today's topic, please feel free to post it here and we can get you connected with Robert. So until next time, stay safe, stay happy, stay healthy, and we'll tune in next time. Goodbye.

Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Landerholm Family Law and Pacific Cascade Family Law, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at landerholmlaw.com or pacificcascadefamilylaw.com. You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys. Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.