Protecting Your Military Benefits In A Divorce

[Note: some of the details have been edited to hide the reader’s identity.]

A reader writes:

“In my divorce decree I was awarded part of my husband’s Reserve “disposable military retirement pay”. My portion is 50% of the time for which we were married, and only for the Reserve points that he earned during our marriage. But the problem is not only figuring out how much I’ll get in dollars (even though I know it can be different in the end) but also my biggest concern is that my husband has to pay me directly. So, how do I know what to expect and to know if he’s ripping me off or not?

Here’s what my decree actually states in regards to what I’m allowed in their words:

‘The wife is awarded a percentage of the husband’s disposable military retired pay, to be computed by multiplying 50% times a fraction, the numerator of which is the number of Reserve retirement points earned during the period of the parties’ marriage, divided by the husband’s total number of reserve retirement points earned. The wife is also entitled to her percentage of living adjustments. The wife shall receive payments at the same time as the husband. The first payment pursuant to this paragraph shall be made in the first month after entry of this final judgment of dissolution of marriage during which the husband receives retired or retainer pay from the United States military. Since the parties were not married for the ten years during which the husband performed creditable service, the military will not divide and send the wife’s share of the husband’s military retirement pay directly to the wife: therefore, the husband shall be responsible for paying to the wife her proportionate share. Since the husband shall receive all payments and is responsible for paying income taxes on the entire amount that he receives, the percentage share of the wife shall be based on the net amount received by the husband.

If the husband takes any action (such as accepting Veteran’s Administration Disability Pay) that reduces the monies which the wife would receive from his military retirement, then the husband shall pay directly to the wife, the amount by which her share is reduced or eliminated. Further, if the husband takes any action that reduces the monies which the wife receives, the court retains jurisdiction to award the wife spousal support to reimburse the wife equal to the amount of any reduction in retirement monies received; and the wife’s subsequent cohabitation and/or remarriage shall not be considered in this award.’

I think it protects me if he makes any changes. The only thing I see really missing is that it didn’t mention about if the husband remarries.

He has to still hold me on his civilian employer’s life insurance policy. I have the eligibility to receive it if he should die before he starts to receive his Reserve pension. But I’m wondering if that means I lose all of the military retirement? That’s one of my concerns as well.

I want to be sure the lawyers did this right. My lawyers have military spouses so I got lots of advice from them on how to make this stick. But just so I’m understanding what’s going on, that’s why I decided to send it here, and maybe that would help you in explaining it to me! I really appreciate you taking the time to review this for me. Thanks again.”

Every divorce decree is different (because state divorce laws vary) but this one is typical.

I’m not a lawyer. I’ve seen plenty of controversial divorces (and a few amicable ones) but I’ve never personally experienced one. However, if I was going to hire a divorce lawyer then I’d want one who’s retired military and possibly divorced. They should certainly be experienced with the latest in federal law, military benefits, and the military agencies that I’ll mention in this post. Divorcing spouses can pull plenty of dirty tricks on each other, and the military retirement system offers way too many tempting opportunities.

My first answer to your questions is “Find a good divorce lawyer who knows the military system.”

But feel free to share this blog post with your lawyer, and I’ll help as much as I can.

My next answer is: verify your ex-spouse’s pension numbers by obtaining the data from his military records.

An alternative would be for your ex-spouse to have his pension estimated by the Department of Defense or by the Defense Finance & Accounting Service, and to then provide a copy of that estimate to you.

It looks like your ex-spouse is expecting a Reserve pension, and that you’re entitled to half of the portion of the pension that he earned during your marriage. You’ve keyed in on the phrase “disposable military retired pay”, which means that some of his DoD pension may be reduced by VA disability income.

Since the Uniformed Servicemembers Former Spouse Protection Act legislation only addresses DoD pension income, if he gives up some of his DoD pension in order to receive VA disability payments then your share (of his smaller pension) would also be fewer dollars. In addition, if you elect to be insured by him under the military’s Survivor Benefits Plan then the premiums would be deducted from his pension before it was credited to his account. Depending on your divorce agreement, the SBP premiums could reduce your share of his pension. It looks like the divorce decree covers that situation.

You’ve also keyed in on the sentence: “The wife is also entitled to her percentage of living adjustments.” You’re getting a percentage of the pension amount, not a dollar figure. However, military pensions are adjusted for inflation, so every year they get a little bigger. If your divorce agreement specifies a percentage, then every year your dollar amount rises with inflation. If your divorce specifies a dollar figure then it never rises.

You’re still covered if your ex-spouse’s pension goes down. Here’s how it could drop: as the years go by your ex-spouse’s disability rating could become more severe. Every time his disability rating rises, he can elect to receive more disability compensation from the VA– which means he has to give up the same amount of his DoD pension in exchange for the VA compensation.

When his DoD pension gets smaller, your share of it stays the same percentage but results in fewer dollars. The only way to avoid this issue is to cover it in the divorce decree. The USFSPA only tells the states that military assets can be divided in a divorce. The only governing document telling the ex-spouses how to divide those assets is the divorce decree.

Now you have to translate the agreement’s percentages and tricky phrases into actual dollars that can be sent to you.

It sounds as though the Defense Finance and Accounting Service will not send your portion of the pension directly to you. Although you were married for over 10 years, the military portion of the marriage falls a few months short of that. However, you can request that your ex-spouse take out an allotment with DFAS to send your share to your account, or that he have an electronic funds transfer sent to you from his checking account.

Every month when your spouse is receiving his pension, DFAS will prepare his deposit. They’ll start with the amount of his pension that’s based on his rank and Reserve points. (We’ll get to that amount later in this post.) They’ll subtract whatever disability compensation he’s receiving (tax-free) from the Veterans Administration. Then they’ll deduct federal taxes. (If your ex-spouse chooses to live in a state that taxes military pay then he could ask DFAS to withhold state & local taxes too.) Finally, they’ll prepare an electronic deposit for that amount to be deposited in your ex-spouse’s checking account.

Your ex-spouse is responsible for ensuring that your portion of that deposit gets to you, and he has to specify it as a dollar amount. He could fill out an allotment form with DFAS listing the dollar figure to be sent to you, or he could fill that form out with his bank/credit union for that amount to be sent to you (after DFAS deposits it with his financial institution). DFAS will distribute the deposit on the last business day of the month (to be available to him on the first of the next month) so you should see either a DFAS allotment or a bank EFT within the first week of every month. DFAS will require an electronic deposit to your account while the bank may be willing to do a paper check or an electronic deposit.

You want to see how DFAS arrived at the numbers. That means you’d want to see his DFAS electronic Retiree Account Statement. Military retirees get a RAS every month now so he could send you one anytime. The RAS will show the numbers he uses to calculate the amount he sends you. Hypothetically you (and your lawyer) could get a court order anytime to see the RAS, so it’s in his interest to comply with the divorce decree.

He could fiddle with the numbers. For example, he could request that DFAS withhold more for federal taxes (and state and local taxes) than he’d actually pay to the U.S. Treasury on his IRS or state tax forms. The following year he’d get a big tax refund that he wouldn’t share with you. Your defense against this would be to check that the tax withholding is “reasonable”, which you’d probably have to discuss through a lawyer. It looks as though your divorce decree already covers any “fiddling”.

He needs to re-do this calculation every year because the decree specifies that you’re entitled to your “percentage of living adjustments”. Each December’s RAS will show how much of a cost-of-living adjustment he’ll get for the next year, and how much his new pension deposit will be. Ideally, he’d voluntarily share that information with you by sending you the RAS and the calculation (or you could get another court order). Then he’d have to adjust the DFAS allotment or his bank EFT. Having to do this every year may make him feel that adjusting the bank EFT is easier than dealing with DFAS allotments.

Survivor benefits are another issue that could affect your payment, whether or not the survivor benefits are for you. Your divorce decree should explain whether he’s required to take out Reserve Component Survivor Benefit Plan insurance on you as an ex-spouse. If you survive his death then you’d get a portion of his pension as a lifetime (inflation-indexed) annuity. If he remarries, he could also elect to insure his next spouse.

If the divorce decree does not say anything about survivor benefits then he’s not required to insure you, and your payments would end with his death. If he remarries and insures the next spouse, then DFAS will deduct those SBP premiums from his pension.

He could fiddle with these premiums, too. If you negotiated SBP as part of the divorce decree then you’d have to decide whether that premium deduction should be part of the calculation used to determine the amount of your share. If he’s paying SBP premiums on the next spouse then DFAS will still make the deduction before his pension is deposited to his account. Again your divorce decree appears to guard against this “fiddling”.

With your current divorce decree, it appears that when he dies then your share of his military pension dies with him. The RCSBP is the only way to receive a portion of his Reserve military pension after his death. Setting that up costs premiums which are as much as 6.5% of his military pension. If it’s been more than a year since the date of the divorce decree then he may not be eligible to apply for SBP on you. However, the SBP program manager may let him re-evaluate that decision at age 60– again that’s a matter for the lawyers to negotiate. In your case, depending on the size of his pension (which affects the size of the RCSBP payments) compared to the amount of his life insurance policy, you may prefer to have the civilian life insurance. It may not be worth your time & effort (and legal expenses) to “upgrade” from his life insurance policy to SBP.

Let’s get back to the amount of his pension. Reserve retirees get their pensions at age 60. (If he was deployed to a combat zone for at least 90 days of a fiscal year after 28 January 2008 then he’d start his pension a few months earlier.) The pension is a percentage of the highest pay base of the highest rank he held, and at the pay tables in effect when the pension starts at age 60. Your ex-spouse joined the military under the High Three pension system, so his pay base will be calculated from the average of the highest 36 months of pay tables in effect when he turns age 60. For example, if he retired as an E-7 then DFAS would use the highest pay table column for that rank (E-7 > 30 years of service) to take the average for the 36 months of the pay tables in effect when he’s ages 57, 58, and 59.

You can’t determine that High-Three 36-month average until the paytable comes out for the year when he turns age 60. When that happens, though, DFAS will give him an estimate of the amount of his pension. You (and maybe your lawyer) will want to see that estimate and the Reserve retirement pension calculations as well. If he’s already age 60 (or if he’s going to turn 60 during 2013) then I can help you with that calculation.

We haven’t even discussed child support, medical benefits, commissary/exchange privileges, or military base access. Again the USFSPA lets the states decide how those assets should be divided, but there are certain minimum criteria for the division (which your marriage might did not meet) and it has to be specified in the divorce decree.

You can see how complicated the military’s pension system has become. When you seek legal advice on these numbers, you absolutely have to work with a lawyer who understands the military pension system. They don’t learn it during law school, and if they have not been in the military then they probably don’t know it very well. You want someone who’s had to learn the system by either being a military retiree or from having to negotiate military divorce settlements.

I think the only thing that protects you from your ex-spouse making changes is his understanding that the courts might make him change them back. In other words, it’s worth his time to follow the rules in order to avoid being hassled by the court. The only way you can protect yourself is to receive updates from him (at least annually) on his pension. The best format for that info is the Retiree Account Statement and whatever calculations he uses to determine your share.

Thanks again for asking the question, and I hope this helps with both your ex-spouse and the lawyer.

Related articles:
Military retirement and divorce
Divorce and a military Reserve pension
Survivor Benefit Plan
The Reserve Component Survivor Benefit Plan

About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
This entry was posted in Military Life & Family, Money Management & Personal Finance. Bookmark the permalink.

16 Responses to Protecting Your Military Benefits In A Divorce

  1. Mr Military Money says:

    Great post! I know so many members that have gone through this situation. This is a topic that it is vital to be educated but is hard for some to talk about.

    • Doug Nordman says:

      Absolutely– servicemembers already have a tough time keeping up with their benefits, and the spouses can be even less familiar with them.

      I’m going to have to write a “make sure you know your benefits” post, and divorce is certainly one of the top reasons.

      • Sylvia J Hall says:

        Did you ever write a guild for Protecting our military benefits in a divorce. I am getting a divorce and not sure how the decree should look like or the wording. I was given everything, SBP, Fers, Life Insurance Spouse Support, 50 % of military pay, and 50% of his DOD job. That I have to protect me and make sure that it state that in the decree my divorce is April 4, 2014. I need help

        Thank yiu

      • Doug Nordman says:


        Thanks for your comment! I haven’t written that book yet, and I don’t plan to get to it in 2014. Maybe 2015, maybe later. The biggest challenge to a book on military divorce is that 50 states have 50 different sets of divorce laws.

        The best advice I can offer here is to hire your own lawyer who’s experienced in military divorces. (It’s a bonus if they used to be in the military.) It sounds like you’re covered in the decree, but a lawyer can immediately recognize the issues and pitfalls. You can use the post above as a start to checking that everything is covered.

        You’ll also want copies of the annual statements of your ex-spouse’s income from the military & civil-service pensions. Those help you check that you’re getting your full share of any cost-of-living allowances. If a new statement shows that a disability reduces your ex-spouse’s military pension (which will reduce your share too), then a lawyer’s help with the divorce decree can ensure that your share of the pension income is made up from your ex-spouse’s other funds.

        Lawyers are expensive. However a few thousand dollars spent now will help you save tens of thousands of dollars over the rest of your life. The returns are worth the investment.

  2. Sylvia says:

    Hi Doug,
    Thank you for your answer and honesty, we’ll my divorce is final and it was hell. Know I have another issue. Maybe you can halo with this, my ex took a loan out on his TSP and know wants me too pay half it was not on the divorce decree. He put the money in a share account with both names. I never knew he borrowed money from the tsp. My understanding is that I need too sign the loan which I did not. Will I be responsible for the loan too. If so can I ask for the signatures on loan and if my signature is there it has been forged. He is still not doing what the court said and I have run out of money have you had any situation like this? If your able too help I really appreciate it. And thank you


    • Doug Nordman says:

      I’m sorry about the hell, Sylvia, but it looks like you’re making progress.

      Here’s a link to the basics of a TSP loan:

      The TSP account belongs to the servicemember, and they could take a loan out on their own without anyone else’s permission. (It’s the same rules if they’re a DoD civil-service employee too.) The TSP account would only be divided between you if it was specifically mentioned in the divorce decree. If he took out the loan after divorce proceedings began, and if the TSP account was divided by the decree, then he would be liable for moving assets without the court’s permission. You’d be able to file a motion for recovery of your share of the TSP.

      I don’t see how you’d be responsible for repaying a TSP loan. He could have taken out the loan without your signature, and I don’t think he could have added a co-signer.

      You might be able to ask a court clerk to help you petition the court to enforce the divorce decree. If the court doesn’t do that then they should be able to refer you to a legal aid group that would provide free assistance. If you still have access to a military base then I’d also consult with their Legal Service Office.

      I hope this works out better. Please keep us posted.

  3. Charles Bohn says:

    Doug, Great article on divorce pensions. When the ex spouse is under the 10/10 rule and payments are made directly to her from me the money still shows up on my 1099. When I file my taxes do I list it as alimony or do I need to send her a 1099 ? Thanks Charles Bohn

    • Doug Nordman says:

      Thanks for the question, Charles! But I’m going to have to defer to an expert.

      The payments could be construed as alimony, but I recommend checking your divorce agreement to see if it’s classified as some other type. The “10/10 rule” is just part of the USFSPA, and the state’s divorce code is the governing law in these situations. Depending on how the payments are set up under state law and in the divorce decree, the payments could be alimony or some other form of support or compensation.

      The 1099 rules have also changed in the last few years (especially for landlords) so you’ll want to consult with a tax CPA.

  4. Military Wife says:

    No military spouse “deserves” 50% of the service member’s retirement in my estimation… They did not put their lives on the line to protect this country… and I say this as a military spouse!

  5. Rebel says:

    I apoliguze if i missed it, but is there a minimum amount of time that you have to be married to your spouse for before they can start recieving part of my retirement? Thank you

    • Doug Nordman says:

      Good question, Rebel, and you didn’t miss it!

      The USFSPA is a federal law that allows the states to treat military benefits as property to be divided during a divorce proceeding. That’s all it does, and it leaves everything else up to the state laws. Any minimum marriage time would be part of your state’s law and the divorce negotiations.

      There are two other time limits to be aware of. One is the 10/10 rule, which means that DFAS will comply with a court order to send the ex-spouse’s share of the military pension to them directly.
      The other is the 20/20/20 rule, which entitles the divorced spouse to Tricare benefits. This rule is explained in more detail (along with many other military divorce issues) at this link:

  6. Kim says:

    So me & hubby are getting a divorce. We been married for 8 yrs. We have 2 kids. How do I know what to apply for. This is our first divorce & we don’t know what we are doing?

  7. Doug Nordman says:

    Sorry to hear about the divorce, Kim. If you or your spouse are in the service, then one of you should meet with a military lawyer to figure out your choices. If the military lawyers won’t see both of you, then one of you can get the JAG’s referral to a civilian divorce lawyer who’s familiar with military benefits.

    In addition to financial and physical assets, the typical military divorce decides how to divide benefits like a pension, the Survivor Benefits Plan, life insurance, the GI Bill benefits, and child support. Your marriage didn’t meet the 10-year requirement of the federal law, but under state law the divorce court can make their own decisions. (Your children are also eligible for medical benefits as family members of the servicemember.) A lawyer who’s familiar with military benefits can make sure that the agreement accounts for military pay raises, promotions, disability ratings, and applicable medical benefits.

    Don’t try this on your own. Get a lawyer who understands military benefits and has handled military divorces.

  8. Sandra says:

    Hello I have a question.
    My son is in the Army he just graduated from basic training and now he’s in airborne school…he got married on 1/12016
    And has a 4 month old baby boy
    Now he gave her a bank card and she has power to everything ..
    Now he wants to divorce her and he’s upset cause she took all the money out of the bank that he just hot awarded $5000
    And disconnected his cell.
    What can we do to stop this if my son now is broke and wants his money back at least half and a divorce????
    By the time he gets out of jump school the banks are close…
    Can he change the bank information too??
    To stop her from getting all the money

    • Doug Nordman says:

      I’m sorry to hear about your son’s marriage problems, Sandra.

      Everything he wants to do with his bank and his pay deposit should be started by talking with his sergeant at jump school. One option would be establishing a new checking account and arranging for his future paychecks to be deposited there. While he’s working out the issues with his spouse, he’d also have to set up an automatic transfer of the correct amount of money in spouse/child support to his original bank (for her to use her bank card). Much of this can be done online (after banking hours) instead of losing training time.

      He should also consult with a military lawyer to make sure that he and his spouse understand their options. Part of the sergeant’s or lawyer’s recommendations might include financial advice through the base’s family support services or Army Emergency Relief.

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