Apportionment Of Military Retirement In Divorce

Navigating a divorce has many layers of complexities.  Navigating a divorce in a military marriage has added layers of complexity.  One of those added layers is the issue of apportionment of military retirement.  In a Virginia divorce proceeding, a military spouse is not automatically entitled to receive a marital share of the military member’s disposable retirement.  There are additional legal documents that must be produced in order for consideration.  The spouse seeking a marital share of disposable military retired pay must include, in a Complaint or Counterclaim for divorce, a request for equitable distribution in accordance with Virginia Code §20-107.3.  Circuit Courts in Virginia, which have subject matter jurisdiction over the apportionment of military retirement in a divorce, have the authority to apportion disposable military retirement pay as follows:

The court may direct payment of a percentage of the marital share of any pension, profit-sharing or deferred compensation plan or retirement benefits, whether vested or nonvested, which constitutes marital property and whether payable in a lump sum or over a period of time. The court may order direct payment of such percentage of the marital share by direct assignment to a party from the employer trustee, plan administrator or other holder of the benefits. However, the court shall only direct that payment be made as such benefits are payable. No such payment shall exceed 50 percent of the marital share of the cash benefits actually received by the party against whom such award is made. “Marital share” means that portion of the total interest, the right to which was earned during the marriage and before the last separation of the parties, if at such time or thereafter at least one of the parties intended that the separation be permanent. (Virginia Code §20-107.3 G.1.)

A military spouse should not assume that 50% of the marital share of the military member’s disposable retirement pay will be awarded.  The following factors are considered by the trial court in distributing marital property:

1. The contributions, monetary and nonmonetary, of each party to the well-being of the family;
2. The contributions, monetary and nonmonetary, of each party in the acquisition and care and maintenance of such marital property of the parties;
3. The duration of the marriage;
4. The ages and physical and mental condition of the parties;
5. The circumstances and factors which contributed to the dissolution of the marriage, specifically including any ground for divorce under the provisions of subdivision A (1), (3) or (6) of §20-91or §20-95;
6. How and when specific items of such marital property were acquired;
7. The debts and liabilities of each spouse, the basis for such debts and liabilities, and the property which may serve as security for such debts and liabilities;
8. The liquid or nonliquid character of all marital property;
9. The tax consequences to each party;
10. The use or expenditure of marital property by either of the parties for a nonmarital separate purpose or the dissipation of such funds, when such was done in anticipation of divorce or separation or after the last separation of the parties; and
11. Such other factors as the court deems necessary or appropriate to consider in order to arrive at a fair and equitable monetary award. (Virginia Code §20-107.3 E.)

The Uniformed Services Former Spouses’ Protection Act establishes the requirements for a state court to obtain subject matter jurisdiction to apportion disposable military retirement pay in a divorce.  In order for a Circuit Court in Virginia to obtain subject matter jurisdiction over the apportionment of disposable military retirement in a divorce, one of the following requirements must be established in accordance with 10 U.S.C. §1408 (c)(4):

1. The military member consents to the jurisdiction of the state court;
2. The court is located in the military member’s state of domicile; or
3. The military member resides in the jurisdiction of the state court for reasons other than the assignment of a duty station in that state.

Disposable military retirement is the gross monthly retired pay to which a military member is entitled with deductions for the following amounts which

(i) are owed by that member to the United States for previous overpayments of retired pay and for recoupments required by law resulting from entitlement to retired pay;

(ii) are deducted from the retired pay of such member as a result of forfeitures of retired pay ordered by a court-martial or as a result of a waiver of retired pay required by law in order to receive compensation under title 5 or title 38;

(iii) in the case of a member entitled to retired pay under chapter 61 of this title, are equal to the amount of retired pay of the member under that chapter computed using the percentage of the member’s disability on the date when the member was retired (or the date on which the member’s name was placed on the temporary disability retired list); or

(iv) are deducted because of an election under chapter 73 of this title to provide an annuity to a spouse or former spouse to whom payment of a portion of such member’s retired pay is being made pursuant to a court order under this section.

(10 U.S.C. §1408(a)(4))

Prior to leaving office, President Obama enacted on December 23, 2016, the National Defense Authorization Act of 2017, which drastically changed the method by which state courts apportion disposable military retirement in a divorce proceeding.  The Act limits the apportionment of disposable military retirement for an active duty service member to the rank of the service member at the time of the legal separation, annulment, or divorce rather than military member’s rank at the time of retirement; therefore, if the military member receives increases in rank following a legal separation, annulment, or divorce, the spouse will not share in the increased retirement benefit other than the retiree cost-of-living adjustments applied to the retirement benefit until the military member retires.  Defense Finance and Accounting Service regulations require that any court order entered apportioning disposable military retirement prior to the military member’s retirement must include the following information:

If the member entered the service before September 8, 1980:

1. A fixed amount, a percentage, a formula, or a hypothetical that the former spouse is awarded;
2. The member’s pay grade at the time of divorce;
3. The member’s years of creditable service at the time of divorce; or in the case of a reservist, the member’s creditable reserve points at the time of divorce.

If the member entered military service on or after September 8, 1980:

1. A fixed amount, a percentage, a formula or a hypothetical that the former spouse is awarded;
2. The member’s high-3 amount at the time of divorce (the actual dollar figure);
3. The member’s years of creditable service at the time of divorce; or in the case of reservist, the member’s creditable reserve points at the time of divorce.

This process is one example of the intricate nature of military divorce and why it is critical to seek the counsel of an experienced divorce attorney to help you in navigating these complexities.  Whether you are a military member or the spouse of a military member, contact Hunter Law Firm to assist you with the process of apportionment of disposable military retirement in a divorce proceeding.