How Does Divorce Affect Military Benefits?

The protection of our nation’s veterans and their hard-fought benefits can evoke strong reactions from many, as evidenced by numerous court cases and Congressional measures over the years. No matter your role in a military marriage, it is important to understand both the development and current state of divorce as it relates to military benefits. 

In the 1981 case McCarty v. McCarty, the U.S. Supreme Court held that federal law precludes a state court from dividing non-disability retired pay pursuant to state community property laws. This decision meant that military longevity retirement pay could not be community property subject to division by a court in a divorce action. The Court later extended this reasoning in Howell v. Howell to military disability pay, and even extends to a veteran’s post-divorce waiver to receive disability benefits.

Congress, however, believed that the McCarty decision gone too far. In response, the legislative branch quickly passed the Uniformed Services Former Spouses’ Protection Act (“USFSPA”) which put the question of property division of veterans’ benefits back in the hands of state courts.

The USFSPA as it was passed in 1983 has remained largely unchanged and, with its passage, states could divide the retired pay benefits of veterans like any other community property asset. To be clear: the USFSPA does not automatically entitle a spouse to a portion of a veteran’s retired pay, it only allows state courts to apply state law during the property division phase of divorce.

How does this apply to a Texas divorce? First, it must be understood that Texas is a community property state. This means that during a divorce proceeding, the court will presume that all property acquired during the marriage (such as a retirement account) is property of the marital estate (i.e. “community property”). The court will follow this community property presumption unless there are specific reasons that the property should be considered an individual spouse’s “separate property.”  

Because Texas is a community property estate, the USFSPA permits the state court to apply the community property presumption to a veteran’s retired pay benefit during the property division phase of the divorce so long as certain conditions are met. However, the USFSPA does place some strict limits on the property division. For example, the division cannot grant the non-veteran more than 50% of the veteran’s disposable retired pay. Furthermore, the spouses must have been married for at least 10 years before a former spouse is entitled to retired pay benefits. Finally, a former spouse’s right to a veteran’s retired pay terminates if that spouse remarries after the divorce. Though these limitations may be considered the most significant, the USFSPA includes other language governing cost of living increases and, importantly, disability benefits.

If you have questions about the USFSPA and its effects, contact Kirker | Davis LLP to schedule a meeting with an experienced lawyer today.