Dividing Military Benefits in Divorce

Time away from loved ones, and sporadic communication, are common features of military personnel serving on active duty. Times of separation are hard on any spouse, and an unfortunate side effect of this situation is the higher rates of divorce among those in the military. While military service typically pays less than one could earn in the private sector, the retirement benefits provided by the federal government for those who serve long-term are attractive benefits that push many service personnel to remain active. When someone with years invested in the military finds him/herself in the middle of divorce, military retirement benefits may be the most valuable asset he/she owns. Typically, all marital assets, including retirement benefits acquired or accrued during the marriage, are subject to equitable division. This rule holds, to an extent, for military benefits, but is more complex because of the additional federal law governing how these funds may be handled in state proceedings. Further complicating these matters, a new retirement benefits program for all military personnel went into effect this year that could impact how this money is divided in divorce. A discussion of how the division of military retirement benefits in divorce is generally handled, and how the new structure could impact property division in divorce, will follow below.

Standard Division of Military Retirement Benefits

Florida divorce law on property division says each spouse is entitled to a presumption that the division of assets and debts will be equal. Military service members may take this rule to mean that he/she loses 50 percent of his/her military retirement benefits in divorce, but only benefits earned during the marriage are considered a marital asset. Thus, the percentage a spouse may be able to claim depends heavily upon how long the couple was married while the servicemember was active, and benefits earned before or after marriage will not be included in the marital estate. Further, federal law does not permit the division of military retirement benefits unless a marriage lasted at least 10 years and the time of active military service overlapped by at least 10 years. However, even if the 10-year marriage requirement is not satisfied, a state court can order the military spouse to pay the portion the other spouse should receive under equitable division or award the other spouse a greater share of other assets to account for his/her share. Florida courts like to award the non-military spouse a fraction of the overall value of the pension, calculated by assuming the military spouse will retire after 20 years. However, this approach would give the non-military a portion of benefits earned after divorce, and highlights the need to use an attorney experienced in military divorce so the correct and appropriate valuation method is used.

New Retirement Pension Plans

As noted above, the federal government introduced new military pension plans this year that changes the landscape of this benefit substantially, Traditionally, military pensions were a defined benefit, meaning recipients received a set amount based upon years of service, historical earnings, and a multiplier of 2.5. Under the new system, three different options are available:

• the defined plan remains but the multiplier is reduced to 2;
• the addition of a contribution plan similar to a 401(K), called a Thrift Savings Plan; and
• the ability to accept a lump-sum payment worth one-half to one-quarter of the total retirement savings, payable from the date of eligibility through Social Security retirement age, as well as the option to take a bonus, called Continuation Pay, for agreeing to serve an additional four years.

The practical effect of these new plans is to make valuation of these benefits even more complicated, and thus harder to arrive at a fair division in divorce. These changes make it even more imperative that attorneys with experience in military regulations be used in divorce.

Speak with a Florida Divorce Attorney

Divorce is never easy, but serving in the military does add additional legal and practical implications to this process that must be addressed. Our attorneys know the interplay of federal and state law in military divorce, and can help you get the best possible result.  Contact the Tampa divorce attorneys and family lawyers at All Family Law Group, P.A. in Tampa Bay for a consultation at no charge. They can be reached at 813-672-1900.

by Lynette Silon-Laguna Google+

Resource:

military.com/benefits/military-pay/upcoming-changes-to-military-retirement-system-explained.html