In the state of Washington, a military pension can be considered shared property and is therefore subject to division during a divorce. Washington is a community property state, which means that any property acquired during your marriage is generally considered shared property.
Pension plans, investments, and other retirement plans contributed to, or formed, during a marriage would also generally be considered community, or shared, property. Because a military pension can be considered shared property under Washington law, military divorce can affect your retirement pension if you are a servicemember, and if you are the civilian spouse of a servicemember, you may be entitled to receive a portion of your former partner’s retirement pay. In some instances, you may even be entitled to receive your portion of your partner’s pension directly from the government. Other types of military pay, like disability payments, can also be impacted by your divorce. In this article, we’ll explore the various ways your divorce can impact your military pension.
- First, we’ll explore which military servicemembers receive military pensions and offer a brief overview about how military pensions are calculated.
- Then, we’ll delve into the topic of dividing a military pension during divorce: what are your options and alternatives?
- Next, we’ll discuss the 10/10 rule and the 20/20/20 rule, and what these rules really mean for military servicemembers and their spouses.
- Finally, we’ll explore how collaborative divorce can offer you a more peaceful path toward divorce, especially if your military pension or retirement is on the line.
Because divorce can affect your military pension, and retirement, it’s wise to speak to a divorce lawyer in the state of Washington who can help you navigate division of property and decisions about your military pension. Truce Law is a military divorce law firm in the state of Washington that helps military couples navigate their divorce in a peaceful way. Our collaborative divorce attorneys help couples negotiate creative solutions to some of the toughest questions that divorce can raise.
Who Receives a Military Pension?
There are several military pension plans, some of which work like retirement plans. Others function like disability benefits or supplemental income benefits for low-income veterans.
To receive a military retirement pension, a military servicemember must have served for at least 20 years. According to USA.gov, there are two military pension plans for active duty servicemembers and both pension plans are calculated by looking at the servicemember’s highest 36 months of earnings and averaging them out.
Both pension plans also allow servicemembers to contribute directly to the plan, and the government matches personal contributions for one of the available plans. Because these plans work like a retirement plan, and because servicemembers can also contribute their earnings to the plan, these pensions can be considered shared property during a divorce and the civilian spouse may be entitled to a portion of these benefits, depending on the length of the marriage, other marital assets and retirement savings, and each partner’s financial situation.
If you get divorced, but are not yet retired, your divorce lawyer and other financial advisors can crunch the numbers to estimate the value of your pension plan, based on the number of years you have served, your average pay over 36 months, and any additional contributions made to the plan during the marriage While your spouse may be entitled to a portion of your military retirement benefits, he or she would not receive these benefits until you retire.
Alternatively, you could divide other assets and income or arrange alimony in such a manner as to keep your military pension intact. Your partner might receive a larger portion of assets, income, and property than he or she would have otherwise, but when it comes to retirement, you won’t have to send a portion of your pension to your partner (or have the government take a portion out for you).
Any retirement pay you earn after your divorce would be entirely yours, including additional years of service or increases in pay due to increased income. Basically, if you aren’t retired, your divorce lawyer and financial planners will need to work the military pension formulas to get a snapshot of the kind of military retirement you could be entitled to receive at a given point in time, namely on the date of your divorce.
These calculations can be further complicated if you had served in the military before you got married because any pension you earned before you got married would be considered solely yours and not marital property. Only the portion of pension you earned during your marriage would typically be considered marital property. As you can imagine, the whole thing can get complicated. A military divorce lawyer can help you understand exactly what portion of your military pension would be considered marital property and help you navigate a divorce settlement that works for you and your former spouse.
If you are retired and are already receiving your military pension, your divorce lawyers can calculate your civilian partner’s share of your military pension. Whether your partner would be entitled to receive a portion of your pension would depend on whether you were married during the time you served, how long you were married, and how much you contributed to your retirement during your marriage.
Gray divorces can be especially complicated because they often involve division of retirement assets and accounts, and military gray divorce is no exception. Yet, if you got married older, and you and your current spouse weren’t together during your career in the military, your former partner may be entitled to no portion of your military pension. Timing matters.
Things can get a little more complicated if you are entitled to receive disability benefits as part of your military pension.
Career military servicemembers who become disabled and are unable to return to active duty are eligible to receive military disability retirement. In this case, the military servicemember would receive the pension they would have received for retirement, multiplied by either their percentage of disability or years of service multiplied by 2.5%. Disabled veterans may also qualify for VA disability payments.
When a servicemember becomes disabled, he or she is assigned a “disability rating” by the VA. This rating is based on a servicemember’s estimated loss of function, based on medical tests, doctor’s reports, and VA claim exam results. Individuals with higher disability ratings receive more each month. And veterans who have a disability rating higher than 30% can receive additional money each month for dependents, like children or their spouse. Getting divorced means losing a dependent, which might mean your disability pay could decrease.
Only disposable retirement pay is eligible for division during divorce. VA disability payments are not considered “disposable retirement pay” and therefore the portion of the pension that includes VA disability payments would not be considered divisible as shared property in your divorce. So, if you solely receive VA disability payments, or if a portion of your pension is considered disability pay, the portion considered disability pay would not be considered community property.
How you managed VA disability payments you received during your marriage could have a effect on your divorce settlement as well. If VA disability payments were kept in a separate account, then these payments would be considered separate property, but if disability payments were put into a shared account or aren’t traceable, then any savings or assets that include disability pay would likely just be counted as shared assets during divorce.
Military benefits work in such a way that a disabled military servicemember can choose to receive disability benefits instead of retirement pay. If the military servicemember chooses this option, then the civilian spouse might not be entitled to any amount of the servicemember’s pay.
Veterans who served during a war, and are considered low-income, may also be eligible to receive veteran’s pension benefits. Because these benefits can increase if a veteran has a spouse, these pension benefits can also similarly decrease if you no longer have a dependent. This is another way that divorce could impact your pension.
Must the Pension Be Divided?
Under the Uniformed Services Former Spouse Protection Act, state courts are permitted to divide a military pension as part of a divorce settlement (excluding disability pay). It is important to note, however, that the Uniformed Services Former Spouse Protection Act doesn’t compel state courts to divide military pay, and if a military couple chooses to settle their divorce outside of court, then they can choose not to divide the military pension at all. Some military couples choose to divide property or assets in such a way as to leave the military spouse’s pension intact. This might involve some negotiation during the divorce settlement process.
While Washington state law offers guidance about the fact that a military pension could be considered shared property, state law doesn’t offer specific guidance about how a military pension should be divided during divorce, or whether it should even be divided at all. If a divorce goes to court, a judge will decide about the division of property in a “just and equitable” manner (RCW 26.09.080). The courts will look at each partner’s financial situation (and their separate property), while also considering the length of the marriage when deciding how to divide property.
Couples who want more control about how they divide a military pension and assets during their divorce might choose instead to use the collaborative divorce process. With the collaborative process, couples settle their divorce outside of court, with the help of their collaborative attorneys.
By using the collaborative divorce process, more couples are choosing not to put their financial futures in the hands of a judge and are choosing instead to negotiate their divorce settlements privately. Truce Law is a military divorce attorney in the state of Washington that helps military couples negotiate divorce settlements that work for them. In some instances, couples choose to divide the military spouse’s pension, and in other cases, the military spouse can offer other assets or property to keep his or her pension intact.
When navigating these negotiations, it’s good to have a lawyer help you understand roughly how much of a pension the civilian spouse would be entitled to receive. As we explored earlier, these calculations aren’t always straightforward.
Understanding the 10/10 Rule
Under the 10/10 rule, if you were married at least 10 years, and your spouse was in military service for at least 10 years, you could receive your portion of your partner’s military pension directly from the government. This can make things easier for you and your former spouse if you do decide to divide the military pension because it means that when the time comes to retire, your former spouse won’t have to write you a check every month. The government can do the dividing.
People often get confused about the 10/10 rule, sometimes thinking that because they meet the requirements, they are automatically entitled to receive a portion of their spouse’s retirement benefits. Division of property in a divorce is governed by state law and not federal law. The 10/10 rule falls under federal law, namely, the Uniformed Services Former Spouse Protection Act.
In short, if Washington courts order you to divide your military spouse’s pension, or if you and your former spouse agree in your divorce settlement to divide the pension, then both spouses might be able to receive their portion of the pension directly from the government if the military spouse meets the 10 year service requirement and if you and your former spouse were married for at least 10 years.
Understanding the 20/20/20 Rule
If you and your military spouse were married for 20 years, your spouse performed 20 years of military service, and you were married for 20 years during your spouse’s time in service, you may be eligible for benefits as a former military spouse, even if you get divorced. Under the 20/20/20 rule, former military spouses may retain access to health care, commissary access, and more. Because these benefits are provided directly from the government, they might not impact your divorce negotiations directly, but they could impact your divorce negotiations indirectly.
Because divorce courts tend to look at both people’s financial situation when dividing assets, knowing that your spouse has guaranteed medical benefits and other benefits can put your spouse on more solid financial footing after your divorce.
When it comes to gray divorce, so many difficulties can arise when one partner cannot afford medical care, or when insurance costs are prohibitive. The financially stronger partner can sometimes end up paying for his or her spouse’s medical care or dividing assets in such a way as to make the high costs of care affordable. In this manner, the 20/20/20 rule could have a positive effect on your gray military divorce, if you qualify.
Collaborative Divorce: A Peaceful Way Forward
When it comes to dividing a military pension, there are so many different ways forward.
- The military spouse could pay the civilian spouse a payment or property equivalent to the value of the civilian spouse’s marital share of the military pension. This could include giving the civilian spouse real estate, money, investments, or other assets of equal value.
- The civilian spouse could receive his or her share of the pension when the military spouse retires. These payments may be made directly from the government or may need to be made by the military spouse.
Even if you don’t decide to split a military pension in divorce (and choose instead to substitute future pension payments for a lump sum payment now), your military pension could play a role in alimony and child support obligations.
While there are guides that can help you estimate what a military spouse’s pension might be worth at the time of your divorce, it’s always a good idea to hire a professional to properly value the pension plan before negotiations begin. According to the book, Divorce After 50: A Guide to the Legal and Financial Challenges of Your Divorce, this is especially important if the “nonmilitary spouse is going to receive assets of comparable value instead of sharing in the pension when the military spouse is eligible for retirement.”
When you choose the collaborative divorce process, you and your partner can hire professionals to help you navigate some of the more complex divisions of property. Not only do your lawyers work together to help you negotiate a settlement that works, but you and your partner can also bring actuaries, financial advisors, financial planners, and other professionals to the negotiating table to help you work out a divorce settlement that is fair.
If you are in the military (or are a military spouse) and are thinking about divorce, consider reaching out to the collaborative divorce lawyers at Truce Law today. We offer a more peaceful path forward for couples who want to avoid taking their military divorce to court.
This article is for educational purposes only and does not constitute legal advice. Every situation is unique. For guidance specific to your circumstances, consult a licensed family law attorney in your area.