Divorce and Military Pensions

A military pension is a retirement benefit just like other pensions. A military pension is

provided to military service members. These pensions are a form of deferred compensation;

however, unlike some types of deferred compensation, you can’t borrow from the pension or

cash them out. These pensions are earned/vested after 20 years of service or after a certain

number of retirement points are earned.

In 1983, Congress passed the Uniformed Services Former Spouses’ Protection Act-

USFSPA. As a result, military retirement benefits can be considered marital property subject to

division in a divorce, if state law permits it to be so regarded. In New Hampshire, both vested

and nonvested military pay is marital property, subject to division.

If you’re the spouse of a service member and you’re considering or going through a

divorce, you should address the military pension during the divorce proceeding – not once it’s

over. You should address it during divorce proceedings even if retirement seems like it will

never take place. If you want to receive some portion of your spouse’s retired pay, then the

smartest thing to do is to get a court order that divides the military pension.

In the beginning, the military spouse should be asked about the pension. You need to

understand its value. To do that, you need to get as much information as you can. A lawyer can

help you figure out your fair share of the pension, whether the pension be vested or nonvested.

To get a court order dividing the pension, you either get an agreement to divide the

pension and get it approved by the court or you get an order directly from the court. If you and

your spouse can’t agree, you’ll have to go to trial and let the court decide how the pension will be

divided.

What is divided is pay. A common method of division is to award the former spouse a

percentage of the pension. Another permissible method, though less common, is to award the

former spouse a specific dollar amount from the pension. A third option, which avoids dividing

the pension, involves the non-military spouse’s agreement to receive cash or other assets in

exchange for his or her share of the military pension. You will want to appraise the pension

before agreeing to take other property in exchange for a release of your marital rights in the

pension.

Once you have the court’s order dividing the pension, the order needs to be sent to the

Defense Finance and Accounting Service (DFAS). DFAS is the agency responsible for paying

retirement benefits. This will put the DFAS on notice of your right to collect some portion of the

military pension.

What you hope for is direct payment of the court-ordered pension payment directly from

DFAS. To get direct payment, the divorce judgment must be a final order; the service member

 

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