Dividing property and assets can be an emotionally-charged, contentious aspect of every divorce. An important aspect of this process is handling the division of retirement savings. The rules that govern how money from retirement savings is split between the spouses in a divorce may seem complicated. This is especially true in the case of a military divorce. Due to the complex intersection of civilian law and military rules, the division of retirement benefits in a military divorce is handled differently than in a regular divorce. In this blog, we will provide an overview of this process.
Qualified Domestic Relations Order (QDRO) and Military Pension
Generally speaking, in a divorce, a spouse is entitled to part of the retirement or pension plan. Under the California Family Code, the community property portion of retirement accounts is divided equally unless the parties agree otherwise. The calculation of what constitutes the community property portion depends on the type of retirement account. Generally, pensions are the most valuable asset in a divorce case and they are the most difficult to value. Specifically, when dealing with a pension plan, the statement provided by the Plan does not tell the full story as to the value of the account. Plan statements generally only show the value of the contribution to the account, but not the value of the monthly pension payment. To ensure that a certain amount of one spouse’s retirement account will be paid to the other, the court issues a Qualified Domestic Relations Order (QDRO). This allows the money accumulated on one retirement account to be split and deposited in the other spouse’s retirement account without penalty.
Here’s how things are different in the case of a military divorce. In most military divorces, there is typically a Thrift Savings Plan (TSP), Military Retired Pay and Disability Pay. The court can only divide the TSP and Military Retired Pay. The Disability Pay cannot be awarded as a property right and can only be used as income for the calculation of support. To confuse matters even more, the calculation of the amount of Military Retired Pay a non-member spouse is entitled to depends on whether the military member spouse is on active duty or retired at the time of divorce. Additionally, there is complexity as to disability rating of the military member. A recent law allows a military member to claim a post-judgment waiver of disposable retired pay and convert a property right into income as additional disability pay without recourse.
The payment of Military Retired Pay under a QDRO is also very different in a military divorce. If the marriage lasted at least 10 years overlapping with 10 years of military service (commonly referred to as the 10/10 rule), the payment will be made by the Defense Finance and Accounting Service. Otherwise, the payments will be made by the ex-spouse.
The Importance of Consulting a Lawyer
Because military divorces are governed by different sets of laws and rules, they require a different approach. If you or your spouse are a military service member and your marriage is headed towards a divorce, you need to contact a lawyer who has both the knowledge and experience of all aspects of a military divorce.
The Grey Legal Group offers support, guidance, and legal expertise related to military divorce. Please contact us today so that we can carefully analyze your situation and provide the best advice with regards to your legal options.
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