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Military Divorce and Retirement: Some tough stuff

October 15, 2017

Members of Beal Law Firm just returned from the San Antonio Bar Military Divorce & Retirement Seminar. Going to this seminar is a good reminder that Family Law is complicated stuff.

 

I say that as someone that has virtually, “done it all.”

 

During the first 15 years of Beal Law Firm, when I was mostly a solo practitioner, I handled cases dealing with just about everything — a General Practice. I tried cases dealing with fraud, deceptive trade practices, breach of contract, personal injury, juvenile justice, criminal law, the insurance code, the mental health code — and family law. I handled cases involving trade secrets, employment law, OSHA, probate, and more.

 

Of everything I handled, the most complicated area I found was Family Law — Divorce, Custody, Support, etc. Why? Because it can involve all of the other areas in addition to the very complex Texas Family Code.

 

Within Family Law, the most complex area is the division of retirement assets. Pensions, IRAs, 401(k)s, 403(b)s, Railroad Retirement, Municipal Retirement and the rest all have very difficult to understand rules regarding what must be done to properly divide them.

 

Of all of them, however, the most complicated area of the most complex area of the most complicated area is, in my opinion, Military Retirement.

 

The division of Military Retirement assets in a divorce is incredibly difficult to understand. Even when people think they understand it, they don’t.

 

Here are a few common misunderstandings:

 

1.         The 10 Year Rule. Many people believe that if the parties have not been married for 10 years, that the non-military spouse cannot obtain any of the military spouse’s retirement upon divorce. That is absolutely not true. The 10 Year Rule deals with when the non-military spouse can get his or her payments directly from DFAS, the Defense Finance and Accounting Service.

 

Unless the parties were married for 10 Years while the military retirement was being accumulated, DFAS will send the entire payment to the military spouse, regardless of who is entitled to the money — unless an allotment is set up. If the non-military spouse was awarded a share in the divorce, and his or her payment is not received via allotment, it is up to the former military spouse to send the payment to the ex.

 

2.         The Survivor Benefit Plan. The Survivor Benefit Plan (SBP) is a way to ensure that the non-military spouse will still receive some of the retirement, should the military spouse die before them. It’s sort of like an insurance policy, and it must be paid for, like an insurance policy. More importantly, there are decisions to be made and deadlines to meet, or else even if someone thinks they are covered and protected should the military spouse die first, they aren’t. The rules for everything dealing with SBP are tricky.

 

3.         50/50 Division. Many people think that if two people have been married during the entire time of military service, the retirement will automatically be split 50/50 by the court. That is not true. There is no automatic 50/50 division.

 

In Texas, the court can divide the community portion of a military retirement just as it can divide any other community asset — that is, in whatever proportion the court thinks is fair. So it is at least theoretically possible for two people to marry the day before military service begins for one of them, stay married while the military spouse serves for 30 years, get divorced the day after retirement, and have the military member receive nothing from his or her military pension. It is also possible, with those facts for the non-military spouse to get zero and the military spouse to get everything.

 

And this is just the tip of the iceberg. Also, as was discussed at the seminar, the entire system is undergoing a massive change. That means, with all of the complex rules that exist, there are about to be more.

 

If you or someone you love is a married military member or married to a military member, and a divorce is on the horizon. Get sound advice before that horizon gets any closer.

 

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