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Dividing military retirement benefits in divorce (Part 1: The first three steps)

Dividing military retirement benefits is one of the trickiest elements of a divorce. In my experience, attorneys often will simply avoid the possibility of messing up the division of military retirement benefits by ceding all benefits to the recipient spouse. In fact, some attorneys don't even know how to property calculate the value of these benefits.

The first step to dividing military retirement benefits is to know the rules. The rules can be found in the Uniformed Services Former Spouse's Protection Act. The military loves acronyms so let's call it the "USFSPA". The USFSPA is found at 10 U.S.C. 1408. The act allows the states to divide up military retirement benefits per state rules. The USFSPA also delineates the Survivor Benefit Plan ("SBP"), which is an annuity program that allows the former spouse to continue receiving regular military retirement payments after the service-member/retiree dies. The SBP portion of the USFSPA is found at 10 U.S.C. 1447.

The second step to dividing military retirement benefits is to obtain the documents that show the value. A good attorney may need to obtain numerous documents to obtain this value, including a "Leave and Earnings Statements" (for active duty members), a "Retirement Points Statement" (for reserve and guard members) and a "Retiree Account Statement" (for retirees). Also of interest are SBP election forms, retirement orders, discharge papers and Officer or Enlisted Record Briefs.

The third step to dividing military retirement benefits is to identify the correct valuation system to be used. Active-duty retirement occurs under one of three valuation systems: (a) final retired pay or (b) high-3 or (c) CSB/Redux. These can currently be found Here.

Reserve and National Guard retirements are based on retirement points, not on time served. And the service-member must have 20 "good years" of service to be retirement eligible. A "good year" is one with at least 50 "points".

Also, Reserve or National Guard retirements generally pay out when the retiree reaches 60, while active-duty retirement plans pay out immediately upon retirement. The cost of providing SBP coverage to a former spouse can also differ depending on whether the service-member has an active duty or reserve retirement.

As always, speak to your attorney before making any decisions in this area. Many rules have exceptions and some exceptions have exceptions.