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Division of military retirement pay in Texas divorces

The Federal laws that cover the division of military retirement pay in Texas divorces is known as the Uniformed Services Former Spouses Protection Act (USFSPA). It allows Texas family law courts to have the ability to treat retirement pay for veterans as either separate property owned by the veteran independent of their spouse or as community property that is subject to being divided up in the divorce.

Should the retirement pay in your divorce be determined to be separate property then you would not be at risk of having your spouse be able to walk away from the divorce with any of it. On the other hand, if your retirement benefits are considered to be community property then the laws that govern that subject in Texas would apply. The judge would be able to make a determination on a just and right division of those benefits between you and your spouse.

Retirement benefits would be lumped together with any other “piece” of community property that you and your spouse own. Your marital home, bank accounts, civilian retirement benefits, etc. are all pooled together and the judge would be charged with the responsibility of dividing it up between you both. In some situations, your court can even look to the retirement benefits as a source of income that can be tapped to pay spousal maintenance or child support. This does not happen frequently but it can happen under the USFSPA.

Does your family law court have jurisdiction over you and your spouse?

A relevant question to ask in a military divorce is whether or not the court in which your divorce has been filed actually has jurisdiction over you and your spouse. This means that you and/or your spouse must have minimum contact with the state of Texas in order for your court to have jurisdiction over your case. Keep in mind that only one of you must have those sort of minimum, basic contacts for your case to proceed in Texas.

An important aspect of the USFSPA is that it limits the methods by which Texas can assert jurisdiction over your case. You must be either a legal resident of Texas, have had your actual residence here or consent to the state having jurisdiction over your case. If a court cannot establish jurisdiction over your case for these reasons then it does not have jurisdiction to divide up your military retirement benefits.

What military benefits are actually divided in your Texas divorce?

Assuming that a court in Texas does have jurisdiction over your divorce it will have the ability to divide only your disposable retirement pay and not all of your retirement pay. Disposable, for our purposes, means all monthly retirement pay of yours not counting amounts that are owned by you to the government for previous overpayments, amounts that are identified as compensation for a service-related disability or amounts which are deducted because of an election to provide an annuity to a spouse or former spouse.

Importantly, a recent Supreme Court case called Howell v. Howell came down and held that a state family law court cannot consider disability pay as community property when dividing up retirement benefits in your divorce. What this means on a ground level for you is that your family law court cannot award your spouse any part of your military disability pay and cannot increase the amount of other assets that your spouse receives in the division of your community property due to your receiving military disability pay. This is a huge win for veterans who have suffered service related injuries that have led to them being declared partially or totally disabled.

In effect, if you are or begin to receive in the future military disability benefits there will be a reduction in the level of retirement pension that is due to you and/or your spouse in your divorce case. You and your spouse have the ability to waive this and agree to have the disability pay included in any calculation but this does not happen with much frequency. If you and your spouse agree to do something like this, what you would need to do in your Mediated Settlement Agreement (MSA) is to state that you will increase the amount of your retirement pay your spouse will receive in order to make up for the deficiency caused by your receiving military disability pay.

How your spouse’s benefits award will be calculated

The USFSPA requires that your spouse be awarded an amount of benefits that will be either a specific dollar amount (usually expressed monthly) or a percentage of disposable retirement pay. The manner in which the division of the retirement benefits occurs is up to the judge in your case.

There is a formula, however, that the law outlines on how it can be done. Essentially, your judge would need to take the number of years that you and your spouse were married while you were also serving in the military and would divide up that number of years by the years that you served in the military. That fraction is then multiplied by ½ to give a percentage of total military pay that your spouse would be entitled to when the retirement benefits are divided up.

An example to illustrate the above calculation

I realize that the previous paragraph, while accurate, may be a little confusing. With that in mind let’s consider an example that will present a real life scenario for you to think about:

Suppose that you served in the Marines for twenty years. Of those twenty years of service you were married to your spouse for the last ten. You and your spouse lived together for the entirety of those ten years. In the event that you all get a divorce your spouse would be eligible to receive 25% of your disposable military retirement pay. Note that your spouse would not be eligible to receive this portion fo you leave the military before you reach retirement age.

The math behind the “25%” figure that I offered you in the prior paragraph is determined this way: 120 months (12 months x 10 years of marriage), divided by 240 months (12 months x 20 years of total service) equals ½ (.5). When this percentage is multiplied by .5 we arrive at the 25% figure that was mentioned in the prior paragraph.

Future retirement pay

A Texas family law court can order that future retirement pay be divided up even if your right to receive that future pay has not yet vested. Practically speaking this means that your spouse will receive their percentage of your retirement benefits when and if you become eligible to receive the benefits and actually do start to collect.

A court cannot order you to retirement from the military in order to order the payment of future benefits. A court also cannot order you to serve in the military long enough for these benefits to vest in you. If it is ordered that you pay future retirement benefits as a result of your divorce and you do not

reach the tenure necessary for this to go into effect there will be no retirement pay to divide and therefore the provision would have no impact.

More on future military retirement benefits, and other issues related to this topic will be posted in tomorrow’s blog

Thank you for your interest and attention to this important topic. Texas is home to more active duty military and veterans than any other state and as a result our office has the privilege of representing many people associated with the military. We hope you will join us tomorrow as we continue to cover the subject of military benefits and retirement pay in a divorce.

If you have any questions regarding this topic or any other in the field of family law please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. We offer free of charge consultations six days a week with our licensed family law attorneys. We can address your questions in a comfortable, pressure free environment here in our office. From Baytown to Katy, our office takes a lot of pride in representing people in our community just like you.

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