Dividing Military Pensions and Benefits – Part 1
Divorce is complicated enough without throwing into the mix the fact that one or more of the divorcing parties is a military service member or has military benefits. Fortunately, the Uniform Service Former Spouses’ Protection Act (USFSPA)[1] addresses some military related issues such as service member’s military retirement pay, service member’s Survivor Benefit Plan (SBP), service member spouses’ access to commissary and exchange, and service member spouses’ access to healthcare benefits.
The USFSPA does not automatically confer a right to military benefits upon a military service member’s spouse. Rather, the USFSPA consists of guidelines that allow states to treat disposable military retired pay benefits as marital property according to the state in which the divorce is filed.
In Utah, military retirement benefits accrued in whole or in part during the marriage are divisible.[2] This means that Utah divorce courts treat disposable military pensions just as they would any pension or retirement benefit from any other employer.[3]
What is disposable vs. non-disposable military retired pay? For tax purposes, some military service members have the option of waiving a portion of their military retired pay in order to receive non-taxable Veteran’s Administration (“VA”) disability compensation. The gross amount of gross disposable retirement compensation that can be split in a divorce action is reduced.[4] This can be a real headache for courts when trying to divide military retirement pay. Given that this loophole exists, some courts will try to bring the divorcing parties to a financial place they were before waiving military retirement pay. Some courts may also look at waiving military retirement pay as way of fraudulently attempting to modify the decree of divorce. Consult an attorney before attempting to change the way you receive your military retirement pay.
You can download a PDF version of the USFSPA manual by clicking here
[1] 10 U.S.C. 1408: The Uniformed Services Former Spouses’ Protection Act (https://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA452505)
[2] Utah Code § 30-3-5 and Green v. Green, 751 P.2d 827 (Utah Ct. App 1988)
[3] For more information about how Utah treats marital property, please visit: https://www.divorceutah.com/is-utah-a-community-property-state
[4] See Mansell v. Mansell, 490 U.S. 581 (1989) (Holding that former spouses cannot be awarded any portion of waived disability compensation)