What Does “Military Divorce” Mean?
It means there are 16 key issues that distinguish military divorce from civilian divorce. The issues are listed in the Table of Contents below. Explanations are phrased mainly in terms of what a former spouse needs to know. After all, a former spouse typically has the most to lose.
Service member’s Best Strategy
A service member’s best strategy usually is to remain silent on military benefit issues that a court can affect. Issues not raised by a soon-to-be former spouse and ruled on by the court generally prove to be lost opportunities. When issues are raised, then a service member’s best approach is to ensure the former spouse doesn’t overreach and receive more in the divorce decree than the law requires.
Soon-to-Be Former Spouse’s Best Strategy
A soon-to-be former spouse’s best strategy is to raise and successfully argue as many of the 16 key issues as are relevant to the case. Never forget that courts have no duty to rescue a party from self-inflicted loss due to that party’s ignorance or misunderstanding of important issues. To do so would require a court to favor one party to the lawsuit over the other—which isn’t allowed
Click on the link that follows to learn about common divorce issues in our Family Law section. Call us if you need more information or wish to discuss your case.
1. The Right Time to File
Filing for Divorce Now May Be A Bad Idea
Three critical junctures must be kept in mind, meaning the points where:
- The marriage overlaps 10 years of creditable military service;
- The marriage overlaps 20 years of creditable military service; and,
- The servicemember on a promotion list is projected to be promoted to the next grade.
First, the marriage must have overlapped at least 10 years of creditable military service before a former spouse is eligible to receive their share of retired pay directly from the Defense Finance and Accounting Service (DFAS). When applicable, the court-ordered share is deducted automatically from a retired service member’s paycheck and electronically transferred by DFAS to the former spouse’s checking account. That makes life after the divorce simpler. When the marriage overlapped less than 10 years of creditable service, a former spouse must get their court-ordered share of retired pay from the member.
Since receiving payment directly from DFAS eliminates potential conflict and pitfalls, a soon-to-be former spouse nearing the 10 year “marriage-military overlap” may benefit in the long run by delaying divorce until that juncture is reached. In other words, a divorce can be started a short time prior to the 10 year juncture, but the decree should not be rendered and signed until on or after the critical juncture is achieved.
Second, the marriage must have overlapped at least 20 years of creditable military service before an unremarried former spouse is entitled to receive—in addition to the court-ordered share of retired pay—full medical, commissary and exchange privileges. State courts have no authority to order medical, commissary or exchange benefits in a divorce decree. Federal law controls eligibility and a former spouse either does or does not qualify based on the length of the marriage-military overlap. Since qualification for medical coverage (i.e. TRICARE) alone is a benefit of substantial importance and value, the 20 year juncture should not go unconsidered.
Awaiting Promotion Juncture
Finally, when a servicemember is on a promotion list, the court-ordered share of retired pay is based on the actual rank at time of divorce—not the servicemember’s projected rank. A Texas Supreme Court case from 1987 established that a former spouse is not entitled to share in the gain from an earned but yet-unrealized promotion. Thus, not finalizing a divorce until after the servicemember actually puts on the new rank can increase a former spouse’s share of military retired pay substantially over the course of a lifetime. ↑ Back to Top
2. The Law that Applies
Federal Law in Divorce
An array of Federal and State laws apply to a military divorce. The keystone from among the Federal laws is the Uniform Services Former Spouse Protection Act (USFSPA). The USFSPA establishes that States are permitted—but not required—to divide military retired pay in divorce. State property and procedural laws apply when dividing military retired pay—except for a few Federal restrictions listed in the USFSPA that trump State law. In other words, there is no uniform national method for how to divide military retired pay.
State Law in Divorce
In Texas, the State law that applies is a mix of statutes passed by the Texas legislature and case law that flows from Texas court decisions. The statutes embrace the Texas community property system and exist mainly in the Texas Family Code. The case law reflects how Texas judges over time have employed community property principles when dividing military retired pay. These cases stand as precedent and govern how today’s judges decide current controversies.
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Jurisdiction Made Easy
No court can render a valid and complete divorce decree without first obtaining jurisdiction over the persons—including children, if any—and property involved. Jurisdictional issues are satisfied easiest when both parties previously declared Texas as their home state (i.e. domicile) or otherwise consent to a Texas divorce.
Jurisdiction Over Retired Pay May Prove Difficult
However, a servicemember who is in Texas purely because of military assignment (i.e. meaning the servicemember has evidence that a State other than Texas is their domicile) can deny a Texas court jurisdiction over their military retired pay if the other spouse initiated the divorce. But, the servicemember must be careful to take very specific and timely steps in responding to the other spouse’s suit for divorce—otherwise he or she will have consented to Texas jurisdiction either by intent or misstep.
Two Lawsuits Might Be Required
If jurisdiction over retired pay cannot be obtained, then the non-military spouse may be faced with filing two suits. One suit may need to be filed in Texas to resolve as many issues over which jurisdiction can be obtained (e.g. the divorce, custody, visitation, child support, medical support, property and/or debts). The other suit may need to be filed in the servicemember’s home state to resolve division of the military retired pay.
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4. Servicemembers Civil Relief Act (SCRA)
SCRA Equals Delay, Not Denial
The SCRA—formerly the Soldiers and Sailors Civil Relief Act—looms as a potential factor in every military divorce. The SCRA only can operate to delay—never deny—divorce proceedings. A delay is called a “stay” in the proceeding. A stay generally lasts only 90 days unless further reason is presented to the court regarding a valid need for extension.
SCRA Not Always Invoked Properly
The SCRA mandates that specific procedures be followed before a stay can be granted. It is not uncommon for a servicemember or uninformed attorney to attempt to invoke the SCRA by improper procedure or for improper purpose. In some of these instances, judges have seen through the haze, appropriately denied the SCRA’s protection, and pressed on with the case to a valid and enforceable conclusion. In other instances, judges have granted a stay in proceedings even though the SCRA’s provisions weren’t fully met. Judges tend to do this simply to avoid the appearance of prejudice to a servicemember’s interests. An attorney who knows the SCRA’s intricacies can minimize the chances of an unwarranted stay being granted.
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5. Division of Property and Debts
All Marital Property and Debts Get Divided
When Texas has jurisdiction over both parties, all marital property gets divided in the divorce decree whether it exists in Texas or some other State. Debts get divided too.
Marital property is called “community property” in Texas. Division of community property and debts does not require a Texas court to order a 50-50 split. The Texas Family Code charges courts with making a “just and right” division which requires a balancing of interests. The fact that property located in some other State gets divided too is an important point. It’s not uncommon, for example, for a military couple to own a home in another State.
When Jurisdiction to Divide Property is Lacking
In some cases, Texas may lack jurisdiction over one of the spouses and Texas courts may be unable to divide marital property located in some other State. For example, this situation most likely would arise if:
- A non-military spouse moved back to Texas in order to rejoin family and file for divorce in Texas;
- The servicemember remained stationed in some other State;
- Texas was not the servicemember’s home state;
- The servicemember refused to consent to the suit and had no substantial contacts with Texas by which jurisdiction could be established absent consent; and
- The spouses jointly owned property in some other State.
6. Issues Impacting Military Children
Custody and Visitation
Strictly speaking, Texas law refers to the parent with custody as the managing conservator with the exclusive right to determine the primary residence of the child(ren). Texas law refers to visitation as possession and access.
When Texas Does and Doesn’t Have Jurisdiction
When Texas has jurisdiction over the children, then the Texas Family Code will govern establishment of the initial custody and visitation orders and any future attempts at modification. To learn more now about how Texas approaches custody issues, click here. To learn more now about how Texas handles visitation issues, click here. Of importance to military divorce, the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) establishes that Texas generally would not retain jurisdiction to make future modifications if—years later—neither parent nor any child affected by the order resided in Texas or had a significant connection with Texas.
Special Issues for the Court Order
The Texas Family Code permits several issues to be included in a custody and visitation order that impact divorced parents who live long distances from each other. Since many servicemembers at some point get reassigned to a different city or State, addressing these issues in the initial divorce decree can help eliminate sources of future conflict and costly trips back to court.
Upon request, a court can order reasonable periods of “electronic communication” to help keep the non-custodial parent and children emotionally connected in-between visits. The term “electronic communication” includes contact by telephone, e-mail, instant messaging, and video-conferencing (e.g. Skype). When the servicemember is the non-custodial parent, having a flexible electronic communication provision in the court order is especially important during deployments. Another issue that may impact visitation at some point is how travel expenses for the children—such as airline tickets—will be allocated when divorced parents live in distant cities or different States. Specific solutions to these issues generally don’t appear in a divorce decree unless one of the parties through their attorney insists they be addressed upfront.
When Texas Does and Doesn’t Have Jurisdiction
Similarly, when Texas has jurisdiction over the children, then the child support guidelines from the Texas Family Code will govern establishment of the initial child support order and future requests for modification. To learn more now about how Texas calculates child support, click here. Per the Uniform Interstate Family Support Act (UIFSA), however, Texas would not retain jurisdiction to make future modifications if—years later—neither parent nor any child affected by the order continued to reside in Texas. In such cases, Texas could only exercise jurisdiction if both parents provided consent in writing.
Child Support by Payroll Deduction
It is important to emphasize that the Defense Finance and Accounting Service (DFAS) can garnish a servicemember’s pay for court-ordered child support regardless of how long the marriage lasted. In other words, the 10 year marriage-military overlap requirement applies only to DFAS payment of a former spouse’s court-ordered share of military retired pay—not child support.
Preferences in the Law
The Texas Family Code prefers that the non-custodial parent be ordered to provide health insurance. In the alternative, the non-custodial parent generally is ordered to reimburse the custodial parent for the “reasonable cost” of policy premiums when the custodial parent provides insurance.
Preferences for Active Duty Parents
The preferred approach in military divorce is for the court to order the servicemember to maintain TRICARE enrollment for all eligible children. This isn’t a problem when the servicemember is still on active duty or an active duty retiree.
Fact sheets explaining eligibility for TRICARE Prime/Extra/Standard/Reserve Select and TRICARE For Life as well as the Continued Health Care Benefit Program—to include summaries of benefits and costs, if any—are available for download at https://www.tricare.mil/Publications.
Issues for Reserve and Guard Parents
The issue of health insurance requires even closer analysis when the servicemember is in the Reserves or Guard because of different TRICARE eligibility requirements and benefit levels. Coverage under TRICARE Reserve Select may exist or need to be obtained. Otherwise, the possibility of ordering health insurance through a private employer factors as well.
Other Healthcare Needs
Since the Texas Family Code does not specify what services must be included in “health insurance,” it is important to consider the full spectrum of a child’s needs. Vision coverage is an integral part of TRICARE for eligible children. Dental insurance, however, requires separate enrollment in the TRICARE Dental Program (with separate premiums). These extra needs—especially dental—should be considered when constructing a divorce decree. In all cases—whatever the form of health insurance—Texas law generally requires that parents split any out-of-pocket costs.
Dependent ID Cards
Eligible children normally obtain military ID cards after reaching 10 years of age. However, ID cards can be issued to children under 10 years of age if they reside with a custodial parent who is non-military. The ID card helps ensure access to health care and, when authorized, commissary and exchange privileges for the children. A court order can direct the servicemember to either apply or facilitate application for ID cards when needed—and make the servicemember responsible to the court for renewing the cards at required intervals or replacing them if lost.
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7. Spousal Maintenance (“Alimony”)
Spousal Maintenance Is Tough To Get
Court-ordered spousal maintenance is difficult to get in a Texas divorce. A requesting spouse must prove to the court that they lack sufficient property to meet their minimum reasonable needs. Property the requesting spouse will receive in the divorce counts too.
A requesting spouse also must prove that either:
- The other spouse was convicted of or received deferred adjudication for acts of family violence within 2 years prior to or during the suit;
- The requesting spouse is unable to earn sufficient income because of their own physical or mental disability;
- The requesting spouse is unable to earn sufficient income because substantial care and supervision is required for a child of the marriage due to the child’s physical or mental disability; or
- The requesting spouse has been married to the other spouse a minimum of 10 years and is unable to earn sufficient income because of other reasons (e.g. the spouse has actively sought but failed to secure employment due to a lack of relevant skills).
Spousal Maintenance Won’t Last Forever
When awarded, spousal maintenance should only be ordered for the shortest reasonable period that permits the requesting spouse to earn enough to provide for their own minimum reasonable needs. The maximum length of time that spousal maintenance can be awarded is tied to how long the marriage lasted. Courts can order shorter periods of time, but not longer.
Military Spouses Often Sacrifice Careers
While Texas courts don’t award spousal maintenance readily, it is commonly understood that many military spouses sacrifice their own careers because of the frequent moves associated with military service. This common truth may make a difference depending on the specific facts of your case.
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8. TRICARE, Commissary and Exchange Privileges
Benefits a Court Can’t Award
A former spouse will not be entitled to TRICARE unless they qualify under either the “20/20/20” or “20/20/15” rule. The 20/20/20 and 20/20/15 rules are established in Federal law. Any provision in a divorce decree that attempts to contradict either of these Federal laws is unenforceable.
TRICARE and the 20/20/20 Rule
Fact sheets explaining a former spouse’s eligibility for TRICARE as well as summaries of benefits and costs—to include discussion of the Continued Health Care Benefit Program—are available for download at http://www.tricare.mil/Publications.
A former spouse qualifies under the 20/20/20 rule if at time of divorce: (1) the servicemember has at least 20 years of creditable military service; (2) the marriage lasted at least 20 years; and, (3) at least 20 years of the marriage overlapped 20 years of creditable military service, whether that service was Active Duty or Reserve/Guard. When qualified, a former spouse will receive their own military ID card that helps ensure access to TRICARE—unless the former spouse remarries at which time eligibility is lost.
TRICARE and the 20/20/15 Rule
A former spouse qualifies under the 20/20/15 rule if at time of divorce: (1) the servicemember has at least 20 years of creditable military service; (2) the marriage lasted at least 20 years; and, (3) at least 15 years of the marriage overlapped 20 years of creditable military service, whether that service was Active Duty or Reserve/Guard. When qualified, a former spouse is eligible for TRICARE for one year from the date of divorce.
Commissary and Exchange Privileges
Former spouses qualified under the 20/20/20 rule also receive commissary and exchange privileges. Former spouses qualified under the 20/20/15 rule do not receive commissary and exchange privileges.
Alternatives for Former Spouses Who Don’t Qualify
A former spouse who does not qualify under either the 20/20/20 or 20/20/15 rule must explore alternative forms of health insurance. The first alternative is to obtain health insurance through the former spouse’s employer, if available. It’s best to discuss this option with your employer’s HR representative since plan features, costs and enrollment windows can differ significantly. Another option is a form of transition insurance—the Continued Health Care Benefit Program (CHCBP)—that is affiliated with TRICARE. Briefly, and according to a CHCBP fact sheet published in 2013, coverage for an unremarried former spouse can be purchased in 90 day increments at a quarterly premium of $1,138. As transition insurance, a former spouse generally can purchase CHCBP for up to 36 months of coverage. Call your nearest TRICARE service center and speak with a representative to get up-to-date details about eligibility, benefits, deductibles and co-pays.
TRICARE Dental Insurance
Eligibility for TRICARE Dental insurance parallels eligibility for health insurance. A former spouse who does not qualify under either the 20/20/20 or 20/20/15 rule is ineligible to purchase TRICARE Dental insurance. Alternatives will have to be explored.
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9. Military Retired Pay
“Any misstep affecting division of retired pay, COLAs and SBP, if available, can end up costing a former spouse tens of thousands of dollars—or more—over the course of their post-divorce lifetime.”
Millions of Dollars Can Be At Stake
According to DOD statistics, the sum of retired pay payments to an active duty O-5 (e.g. Navy Commander or Army Lieutenant Colonel) who retired in calendar year 2012 with 20 years of service will total more than $2.56 million during the servicemember’s lifetime (assuming annual 1.5% cost of living adjustments). The same calculations for an E-7 (e.g. Air Force Master Sergeant or Marine Corps Gunnery Sergeant) who retired with 20 years active duty will total more than $1.275 million during the servicemember’s lifetime. The amount of money at stake for a former spouse is even greater when considering the impact of the Survivor Benefit Plan (SBP) which, if available, provides a former spouse income protection after the servicemember’s death.
Don’t Forget These Items in the Decree
A carefully crafted divorce decree should ensure a former spouse not only receives a fair share of military retired pay, but also a fair share of all cost of living adjustments (COLAs) and SBP protection, if available. Any misstep affecting division of retired pay, COLAs and SBP can end up costing a former spouse tens of thousands of dollars—or more—over the course of their post-divorce lifetime.
There is a critical difference between the time retired pay begins for Active Duty and Reserve/Guard servicemembers. Active duty servicemembers begin to receive retired pay immediately upon retirement. Reserve and Guard members generally do not begin to receive retired pay until reaching age 60. This critical difference can affect a former spouse’s income security and may need to be factored into other aspects of a property settlement.
What if the Servicemember isn’t Retired Yet?
Texas courts can divide military retired pay whether the entitlement is unvested or vested at time of divorce. Retired pay is unvested when the servicemember is not yet eligible to retire (i.e. the servicemember has yet to achieve 20 years of creditable military service, also known as “20 good years” for a Reserve or Guard servicemember). Retired pay is vested when the servicemember either has already retired or is retirement eligible but still serving.
The formulas for how military retired pay gets divided are established in Texas case law. The formulas differ based on which of the four categories the servicemember falls into:
- Active duty in retired status;
- Active duty still serving;
- Guard/Reserve in retired status (whether “gray area” or receiving retired pay); and,
- Guard/Reserve still serving.
How Much Can a Former Spouse Get?
A misconception exists that a former spouse is entitled to half of the servicemember’s retired pay in divorce. As a wholesale generalization of law, this misconception doesn’t hold true anywhere in the United States. In Texas, the former spouse typically is entitled to half the marital share of the servicemember’s retired pay. How the marital share gets calculated depends on which of the four categories listed above applies. In only one situation will half of the marital share equate to half of all retired pay. That one situation occurs when the servicemember is retired at time of divorce and the marriage overlapped the servicemember’s entire military career.
Are Payments Taken Directly From the Servicemember’s Retired Pay?
The Uniformed Services Former Spouse Protection Act (USFSPA) limits the Defense Finance and Accounting Service’s (DFAS) participation in enforcing a valid decree. Recall that DFAS will only pay the court-ordered share to a former spouse if the marriage overlapped at least 10 years of creditable military service. Thus, DFAS will reject any court order that does not satisfy the 10 year marriage-military overlap rule. In these instances, the court-ordered share awarded the former spouse is still valid, but the former spouse must seek payment directly from the servicemember. A properly crafted decree can help ensure the former spouse gets paid by the servicemember through the power of the court to hold the servicemember in contempt for failure to comply.
Who Files the Post-Divorce Application for Payment?
The Cramp Law Firm files the application for retired pay with DFAS every time a former spouse client is eligible to receive direct payments. When eligible, we file the application whether the servicemember is:
- Still serving but not yet retirement eligible (i.e. more than 10, but less than 20 years of creditable service);
- Still serving but already retirement eligible (i.e. at or beyond 20 years of creditable service); or
- Already retired.
In all cases where the servicemember is still serving, early submission proves beneficial. Upon receipt of an early submission, DFAS will review the application and conditionally approve or disapprove the application in writing within 30 days of receipt. Early submission and conditional approval enhances peace of mind for the former spouse.
Thousands of Dollars are at Stake during the “Gap Period”
Conditional approval is not final approval. Final approval doesn’t occur until the servicemember actually qualifies for retired pay payments. Then, DFAS’ internal procedures cause a delay in the start of direct payments to an eligible former spouse. The delay can be as much as 90 days. This delay creates a “gap period” in direct payments from DFAS against which a former spouse requires protection. A carefully crafted decree should include a provision that makes the servicemember personally liable for monthly payments to the former spouse immediately upon the start of retired pay payments—with direct payments made by DFAS credited against this obligation. Otherwise, a former spouse could suffer loss of up to three monthly payments during the gap period—and the retired servicemember would unjustly enjoy those extra payments. Without protection, a former spouse’s losses during the gap period can total several thousands of dollars.
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10. Survivor Benefit Plan (SBP)
Replacing Retired Pay at Death
Military retired pay stops upon the servicemember’s death. SBP is a purchased annuity that—if available—replaces military retired pay to provide a guaranteed monthly income to a spouse or former spouse.
Federal law permits a State court to order “SBP former spouse coverage” in a divorce decree. Eligibility for SBP former spouse payments is lost if the former spouse remarries prior to age 55. Eligibility can be regained, however, if a former spouse’s subsequent marriage later terminates by death, annulment or divorce.
“Spouse” vs. “Former Spouse” Coverage
Sometimes “SBP spouse coverage” already exists at time of divorce. This would occur where a servicemember retired prior to the divorce and, during retirement processing, elected to provide SBP for the spouse. In these instances, obtaining court-ordered SBP former spouse coverage in the decree still remains critically important. “Spouse coverage” and “former spouse coverage” are separate and distinct SBP provisions. There is no mechanism in Federal law whereby “spouse coverage” automatically converts into “former spouse coverage.” Per Federal law, “spouse coverage” terminates upon divorce. Former spouse coverage will not exist unless it is ordered—and secured by timely application (discussed next).
The Court’s Order Itself Doesn’t Create Coverage
Obtaining court-ordered SBP former spouse coverage in a divorce decree does not create coverage—it only creates the possibility of coverage. This important benefit can be lost if a proper application for former spouse coverage is not timely filed with the Defense Finance and Accounting Service (DFAS). The good news is that DFAS permits a former spouse or their attorney to file the application in a timely manner—it does not have to be done by the servicemember. However, if a proper application is not received by DFAS within one year of the divorce, then the court order for SBP former spouse coverage becomes a worthless piece of paper. Sadly, this outcome has occurred in too many instances where either the attorney or the former spouse didn’t know about the need to file or simply dropped the ball.
Per Federal law, proper filing by the former spouse or attorney constitutes a servicemember’s “deemed election.” Here at the Cramp Law Firm, we leave nothing to chance—we file a proper and timely deemed election with DFAS and ensure acceptance for our former spouse clients.
SBP isn’t always Available
“Here at the Cramp Law Firm, we leave nothing to chance—we file a proper and timely deemed election with DFAS and ensure confirmation of receipt and acceptance for our former spouse clients.”
There are situations where court-ordered SBP is not an option. Per Federal law, SBP coverage cannot be split between two former spouses. If a previous spouse already obtained SBP former spouse coverage in an earlier divorce, then a second former spouse must pursue other options to provide income security after the servicemember’s death. Generally, a court-ordered insurance policy on the servicemember’s life should be considered.
Servicemember Concern: Avoiding the “Death Windfall”
When SBP takes over after the servicemember’s death, it pays 55% of the insured “base amount” to the designated beneficiary—unless a smaller percentage is specified. The “base amount” by default is the servicemember’s gross monthly military retired pay. Yet, court’s typically award a former spouse 50% or less of the servicemember’s retired pay. Thus, a former spouse will receive a “death windfall” when SBP starts paying a higher amount than the former spouse’s share of retired pay. A death windfall can be avoided if the base amount is decreased in the court’s order so that SBP pays at a rate equal to the former spouse’s court-ordered share of military retired pay.
SBP for Reserve and Guard Servicemembers
SBP provisions for servicemembers in the Reserves or Guard differ from those available for active duty. Reserve and Guard servicemembers have three SBP options—Option A, Option B, and Option C. Under Option A, the servicemember may decline coverage altogether or defer the decision until they begin receiving retired pay (generally at age 60). If the decision is deferred and the servicemember dies in the interim, then a former spouse has no SBP coverage. Option A is the worst outcome for a former spouse. Under Option B, the servicemember selects a deferred SBP annuity that—in the case of earlier death—begins SBP payments to the former spouse on the date the deceased servicemember would have begun receiving military retired pay (generally when the servicemember would have been age 60). Option B provides a better outcome for the former spouse, but it is not as good as Option C. Under Option C, the servicemember elects to provide an annuity that begins upon his or her death—regardless of whether the servicemember would have been eligible to receive military retired pay. The premiums are higher, but the coverage under Option C provides the maximum income protection for a former spouse. A former spouse and their attorney should push hard to get Option C ordered in the decree, if SBP remains available.
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11. Filing Applications and Court Orders with DFAS
Unburdening the Former Spouse
As mentioned earlier, we leave nothing to chance at the Cramp Law Firm. We file proper and timely applications (which require a copy of the court order certified within the last 90 days) with the Defense Finance and Accounting Service (DFAS) for both court-ordered retired pay and Survivor Benefit Plan (SBP) coverage whenever we represent the former spouse. We also ensure confirmation of receipt and acceptance for our former spouse clients. We do not rely on a servicemember filing the paperwork on behalf of a former spouse. We do not burden a former spouse client with these critical tasks. Rather, we do the paperwork and follow-up for our former spouse clients because it’s the right thing to do—it provides maximum value and peace of mind from our representation.
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12. Disability Compensation
There Really Are Two Disability Systems
There are two systems of disability compensation—one administered by the servicemember’s respective Military Department (e.g. Department of the Army, Navy, or Air Force) and the other by the Department of Veterans Affairs (VA). The Military Departments’ system is designed to compensate members determined by their military service to be unfit for continued duty. The VA’s system compensates members who have either separated or retired for service-connected disabilities that accumulated over the years of service. The remainder of this section focuses on the VA’s system since the vast majority of servicemember’s receiving disability compensation fall under this system.
The VA’s System and Its Impact on a Former Spouse
The VA’s system produces a disability rating between 10% and 100%. The disability rating is based on the VA’s evaluation of the servicemember’s medical record in concert with examinations by VA medical specialists. Servicemembers with a disability rating of 10% or greater are entitled to disability compensation paid by the VA.
In all cases, Federal law requires the servicemember to waive an equivalent amount of military retired pay in order to receive VA disability compensation. Waiver produces what is known as “the VA offset.” In most cases, the VA offset triggers a reduction in the former spouse’s share of court-ordered retired pay. In other cases, another provision of Federal law—known as Concurrent Retirement and Disability Pay—permits the former spouse to escape any negative impact despite the VA offset.
In all cases, potential negative impact to a former spouse from the VA offset can be avoided if specific contractual provisions are successfully included in the decree. Otherwise, if the amount of VA offset is known at time of divorce, Texas law permits a court to consider its impact when dividing the sum total of all marital property. In other words, while a court cannot award a share of VA disability compensation, it has discretion to award a greater share of other marital assets to mitigate the VA offset’s effect.
The subject of disability compensation contains further twists and turns. A qualified attorney will be able to provide sound advice only after discussing the specific facts of your case.
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13. Thrift Savings Plan (TSP)
Don’t Overlook TSP
TSP offers Federal civilians and servicemembers the same types of savings and tax benefits offered by private employers in the form of 401(k) plans. Sometimes TSP gets overlooked in divorce because of the intense focus on dividing military retired pay. That could prove to be a costly mistake for a former spouse.
Dividing TSP Differs From Retired Pay
TSP requires its own unique language in the decree to divide TSP assets. Unlike private employer plans, TSP is not governed by the Employee Retirement Income Security Act (ERISA). TSP is distinct from the military retired pay system. Thus, neither a Qualified Domestic Relations Order nor Military Retired Pay Division Order will qualify to divide TSP. A knowledgeable attorney can navigate these complex waters safely and efficiently for a former spouse.
Avoiding a “Raid” on the Account
If warranted, it is possible to freeze a servicemember’s TSP account via a temporary court order so that withdrawals cannot be made and loans cannot be taken out before the divorce is finalized. Preventative action such as this can preserve significant amounts of money for a former spouse—and avoid more costly, messy legal battles.
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14. Separation Pay
Court-Awarded Retired Pay May Never Arrive
Any time a divorce occurs prior to the servicemember achieving retirement eligibility (i.e. the servicemember has less than 20 years of creditable military service), the former spouse’s court-ordered share of military retired pay is a “contingent property interest.” The contingency is that the servicemember must actually retire and begin receiving retired pay before the former spouse can realize the first penny from the court-ordered share.
A Former Spouse’s Contingent Interest Can Be Extinguished
A former spouse’s contingent interest can be extinguished in one of two ways. The first way is if the respective military service (e.g. the Army, Navy, Marine Corps, Air Force or Coast Guard) involuntarily separates the servicemember prior to retirement eligibility. Sometimes this occurs due to reduction in force initiatives (also known as “force shaping”). The second way is if the servicemember voluntarily separates prior to retirement eligibility. While a former spouse has no say in either decision, they don’t have to come out on the short-end-of-the-stick in all cases.
Aftermath of Involuntary Separation
A former spouse will come out on the short-end-of-the-stick whenever a servicemember receives separation pay for involuntary separation. The Texas Supreme Court determined in a 1979 case that involuntary separation pay is not community property and thus not subject to division in divorce.
Aftermath of Voluntary Separation
A former spouse should not have to come out on the short-end-of-the-stick whenever a servicemember gets paid an incentive to voluntarily separate. In one Texas case from 1996, Marsh v. Wallace, the court concluded that voluntary separation pay was “in the nature of retirement pay” and thus subject to division in divorce. In Marsh, the court noted that not permitting division of voluntary separation pay would allow the servicemember to “diminish or completely defeat [a former spouse’s] interest in [the servicemember’s] retirement benefits.” A carefully crafted decree should seek to protect a former spouse against this injustice.
A Former Spouse Could Lose Twice
It must be emphasized that the specific rules of separation programs change over time. In some instances, rules condition payment on the servicemember accepting an obligation to serve in the Reserve or Guard after leaving active duty. It should be understood that, if the servicemember later qualifies for a Reserve or Guard retirement, then the court-ordered share of military retired pay previously awarded to the former spouse will kick in—if the decree is on file with the Defense Finance and Accounting Service (DFAS). However, phased recoupment of the separation incentive paid years or decades earlier may be required. If required, this will decrease the former spouse’s share of retired pay for the duration of the recoupment. Thus, a former spouse would lose twice if: (a) they didn’t receive a share of the voluntary separation pay; and, (b) later are forced to share in a temporary reduction of military retired pay due to voluntary separation pay’s mandatory recoupment. This unavoidable-but-temporary effect is another reason the decree should be carefully crafted.
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15. Military Service and Civil Service Retirement
Military Service Credit Is Not a Small Issue
The Office of Personnel Management (OPM)—which administers policy and programs for the Federal civilian workforce—stated in a 2012 publication that nearly one-half million veterans make up 28.3% of the Federal workforce. That makes crediting military service toward a Federal civil service retirement an important issue for a former spouse. Two aspects of this issue should be factored into a military divorce.
The first aspect is protecting against the possibility that, after divorce, a servicemember may:
- Separate short of military retirement;
- Take a Federal civil service job; and,
- Credit his or her years of military service toward a civil service retirement.
The second aspect is when, after divorce, a military retiree:
- Pursues Federal civil service employment as a second career; and,
- Subsequently waives military retired pay in order to credit his or her years of military service toward a civil service retirement.
In both cases, a carefully crafted divorce decree that is on file with DFAS can help guard against the former spouses getting shortchanged.
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16. Military Divorce and Family Violence
Why Some Abused Spouses Stay Silent
Understanding the benefits and income protection the military provides to spouses and dependent children who are victims of family violence is an important issue that isn’t well understood. Tragically, a lack of understanding may cause a spouse to refrain from reporting family violence for fear of destroying the servicemember’s career—which may cut off income and benefits on which the spouse and children depend. The abuser may have even fueled this misconception in order to exert control. Fortunately, special protections exist in both Federal law and military service policy to help victims avoid becoming destitute.
When the Servicemember Is Retirement Eligible
The Uniform Services Former Spouse Protection Act (USFSPA) offers income and benefit protection when a servicemember who is retirement eligible—but still serving—has his eligibility for retired pay terminated for misconduct involving a spouse or dependent child. This protection exists whether the termination resulted from administrative or legal proceedings.
With eligibility for retired pay lost, the servicemember-abuser gets nothing. However, a former spouse can receive a court-ordered share of disposable military retired pay the servicemember would have been entitled to as of the date that eligibility was lost. By Federal law, the servicemember has no ownership interest in or claim against the payments to the former spouse. The former spouse, however, loses eligibility for these retired pay payments upon remarriage. While receiving payments, the former spouse and any eligible dependent children also qualify for medical and dental care (i.e. through TRICARE) and commissary and exchange privileges the same as if they were the spouse of an actual, retired servicemember.
When the Servicemember Is Not Retirement Eligible
A different provision of Federal law authorizes DOD to operate a Transition Compensation Program (TCP) to help a spouse and any eligible children who are victims of family violence transition to civilian life. TCP applies in cases where:
- The servicemember has been on active duty for at least 30 days, but is not yet retirement eligible; and,
- The servicemember is convicted of a “dependent abuse offense” and, as a result of court martial, is being separated from the service or forfeits all pay and allowances; or,
- The servicemember is administratively discharged, whether voluntarily or involuntarily, on the basis of a “dependent abuse offense.”
Each military service has its own TCP implementation regulation. Current details about TCP can be obtained from either the Staff Judge Advocate or Family Advocacy Program/Victim Advocate. TCP benefits generally last for 12 to 36 months and include a monthly stipend tied to the Dependency Indemnity Compensation tables ($1,215 per month in 2013 plus allowances for eligible children), medical, dental, and commissary and exchange privileges. Eligibility for benefits is lost if a former spouse remarries during the period benefits are provided.