What Happens To A Military Pension In A Divorce In Washington State?
MILITARY DIVORCE: PENSION ISSUES
Service members who retire following 20 or more years of creditable service are compensated with a retirement for the rest of their lives. A military pension is community property. In a divorce setting, both the service member and their spouse need to understand how and when the military retirement is subject to division. The manner of division and payment are determined by several factors, including the length of marriage, the overlap in years of marriage with the years of creditable service, and the value of other community assets subject to division. There are also important distinctions between a retirement pension and disability pension.
1. The 10 Year Rule.
An eligible spouse may be entitled to receive up to 50% of a military retirement under the Uniformed Services Former Spouses Protection Act (USFSPA). To be eligible, the spouse must be married to the service member for at least ten (10) years of creditable service. Determining when the years of marriage overlap with years of creditable service can be complicated, especially when the service member’s career was not exclusively active duty.
The key benefit to establishing an award under the 10 Year Rule is automatic payment of up to 50% of retiree’s pay to the eligible spouse. This benefit means less communication and cooperation between divorcing spouses in the future: the retiree’s benefits are automatically reduced and the divorcing spouse does not have to chase the retiree for ongoing payments.
2. Division when less than 10 overlapping years.
A marriage lasting only 9 years and 11 months of creditable service will not qualify for the payment benefits under USFSPA. However, under Washington state law, a spouse may be entitled to receive some portion of the military retirement even when eligibility cannot be established using the 10 year rule. Any portion of the military retirement earned during the marriage is community property.
If the marriage did not last at least 10 years, retirement payments will not be made directly to the spouse and the retiree will be personally obligated to pay the former spouse from each check received. In these cases, it is often appropriate to consider other options for division of the community estate.
3. Military retirement awards are negotiable.
Through negotiation, divorcing spouses can tailor division of their estate to suit their individual needs. If there are other assets in the community (in addition to a military pension), the parties can agree to offset one asset in exchange for a larger or smaller percentage of the pension. A spouse may ask for more than half of the pension even if married for less than 10 years or the service member may offer a smaller division of the pension in exchange for another asset (e.g., home equity).
In every case, it is important to have counsel review your case and provide you options.
