Pitfalls of a Military Divorce
In so many ways, the military community is a different beast. We have our own lingo. Our own unique challenges. Our own justice system. We rely on established, consistent systems to manage life's curveballs.
But when our marriages fail, we rely on local state laws to get divorced. Since the laws are slightly different in each state, that generally means hiring a local attorney who is well versed in divorce law and procedure in that area.
Problem is, most local attorneys have little to no knowledge of military topics that must be addressed in the divorce. If mishandled or, worse, ignored, the financial damage can effect you forever.
If you find yourself in the unfortunate position of being a part of a military divorce, make sure to address these topics with your attorney:
CHILD SUPPORT
Every state has a unique formula for computing child support, normally based upon the parents' incomes, parenting schedule and number of children.
When computing the income of the service member, it is important to note that the W-2 does not accurately reflect the true income. Service members receive certain non-taxable "allowances" that reduce personal living expenses, most commonly for food and housing. These allowances must be included.
You can normally get assistance from the military service when enforcing a child support order. Military regulations promote support for dependents, and communication with the member's commanding officer should ensure compliance. An Income Withholding Order can result in the support taken directly from the member's paycheck.
COMMISSARY, EXCHANGE & HEALTH CARE BENEFITS
The brains who designed the rules surrounding former spouse benefits did not seek clarity. First, the easy part: if the service member served at least 20 years and the length of the marriage overlapped the service by at least 20 years, the former spouse will have full access to continued benefits.
If both the period of service and marriage exceeded 20 years, but the service and marriage overlapped by 15 years, the former spouse is only entitled to one year of medical benefits following the divorce. The coverage immediately ceases if the former spouse remarries or enrolls in another healthcare plan.
Spouses who do not meet the above requirements are not entitled to any military healthcare benefits following a divorce. They may obtain the military version of COBRA coverage, called the "DOD Continued Healthcare Benefit Program," for up to 36 months, provided they enroll within 60 days of losing coverage.
MILITARY RETIREMENT
Most state laws allow military retirement benefits to be divided in a divorce. The military version of the 401(k), called a "Thrift Savings Plan," is divided just like its civilian counterpart.
A military pension must be divided in either a fixed dollar amount or as a percentage of "disposable retirement pay," which is essentially the pension less any any service-related disability. A Qualified Domestic Relations Order, or QDRO, is not necessary.
If the marriage and military service overlap for ten years or more, the non-military spouse may receive his or her awarded share directly from the Defense Finance and Accounting Service, or DFAS. If not, the share must come directly from the military member.
SURVIVOR BENEFIT PLAN
The Survivor Benefit Plan, or SBP, is an annuity that provides a beneficiary with monthly payments for life. The service member will be enrolled upon retirement unless he or she opts out. Costs are deducted from the retiree's monthly pay and are based on the amount of coverage.
The premiums for SBP coverage are non-taxable, and the benefit increases with inflation. But once you enroll, changing your election is difficult.
If a divorce occurs after retirement, a non-military spouse can still have coverage. In such a case, he or she must contact DFAS to request "former spouse coverage" within one year of entry of the final decree of divorce in order to lock in the benefits.
Lawmakers have worked hard to look out for military families. When divorce becomes a reality, paying attention to these topics may not fully protect a former spouse. But it will certainly provide some security.
