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Supreme Court weighs in on division of military benefits

The military offers gold-plated benefits tied to the sacrifices of frequent relocation and deployments served far from family. In divorce, these benefits are a common point of contention.

What portion of retirement benefits is each spouse entitled to? Is an ex-spouse guaranteed to receive an offset if retirement benefits are waived? These military divorce questions involve federal and state laws.

Military disability rather than retirement pay

In the Howell v. Howell case, a couple agreed that each spouse would receive one-half of the military retirement benefits. The year after the divorce, the husband retired from the Air Force.

A number of years later, the husband filed a disability claim with the Veteran's Administration for a degenerative joint disease related to his service. He started receiving disability payments. To avoid a "double dip" of benefits, he agreed to waive a portion of his retirement pay. The difference was approximately $250 each month, which effectively reduced the amount his ex-wife received.

After filing a motion, the state court applied state and federal law to find that she had a vested property right in half of her ex-husband's retirement pay. This meant that she was entitled to receive the same payment.

Disagreement from the high court

Basing its decision on the Uniformed Services Former Spouses' Protection Act, the Supreme Court reversed. The federal court found that the federal statute pre-empted state law. They held that the ex-husband did not need to indemnify his ex-wife for the reduction in her retirement pay that resulted when he elected to receive disability payments.

While the monthly amount in question was $127, this adds up over a retirement. Many decisions in the divorce process related to property division hinge on estimates for future income streams. An ex-spouse intent on shifting the income balance might agree to divide retirement 50/50, but then file for disability and waive retirement pay. Even if this not thought out in advance, it could be a common scenario.

This case demonstrates the importance of working with a divorce attorney who understands unique military issues. The only way to ensure that property division is fair is to work with a tough military divorce attorney.

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