One of the most valuable assets in any long term marriage is the military retirement. It also is the one thing that every service member resents having to share. No matter. It is marital property, and it is subject to division. There is a widespread myth in the military that the spouse is not entitled to receive a portion of the retirement until the parties have been married for ten years. Not true. This only concerns direct payment from the Finance Center. After ten years, the Finance Center will pay the spouse directly. The spouse is entitled to fifty percent of the "marital portion" (part during which the marriage and active duty service overlap) unless all or part are waived.
Survivors' Benefit Plan (SBP)
The Survivovors' Benefit Plan (SBP) which provides coverage for the surviving non-military spouse for his/her share of the military retirement often is ignored or the documents are not sent in within the mandatory one year period by the ex-spouse. In many cases, private insurance may be more cost-effective than SBP, but it should be considered, especially in circumstances in which the service member has a condition that would make private insurance hard to obtain.
An interesting feature of the SBP is that coverage ends if the spouse remarries before age 55 but can be reinstated if that marriage ends in death, divorce or annulment.
SBP can provide coverage for the full retirement or for the spouse's fractional share.
One of the valuable benefits that service member's have is very low cost life insurance in the form of Servicemembers' Group Life Insurance (SGLI). The cost increases greatly if they want to retain a variation of this coverage after retirement. Unlike other life insurance policies, however, even if a court orders a service member to make or keep a former spouse as a beneficiary under his/her SGLI policy, the beneficiary still can be changed. If you want there to be life insurance with a binding beneficiary designation, there needs to be another policy-preferably with the former spouse as the owner.
Thrift Savings Plan
For many years, service members have had access to Thrift Savings Plans which allow their contributions to accrue profit tax-free until retirement. Theses plans are often overlooked. A look at Leave and Earnings statements will show whether voluntary deductions are being made.
Re-enlistment bonuses also are marital property and are subject to division.
The spouse is not entitled to any of the disability pay that is received from the Veterans Administration that is set off dollar for dollar against the military retirement pay. For example, if the service member is 30% disabled, he waives 30% of his military retirement pay and receives this money instead from the VA. The spouse then receives her share based on the remaining 70%.
Timing of the Divorce
Do not be hasty in finalizing the divorce. Consider the implications for current and future benefits. For example, a spouse who has been married for 20 years which coincides with 20 years of military service can retain full medical and base privileges. Such a spouse would not want to divorce at 19 years or those benefits would be lost.
Additional resources provided by the author
Mary Commander has handled military divorces for 30 years in Norfolk, VA.