Military Retirement Benefits and QDROs
What is the most valuable asset you possess? You may immediately think of your house or car. However, an overlooked asset for many are their retirement benefits. Retirement benefits are a significant asset in a divorce. Nevada is a community property state. This means that in a divorce, the courts will equally divide community property and debt among spouses. Military retirement benefits and QDROs are complex topics. Depending on the type of plan, both state and federal law can apply. A knowledgeable lawyer can draft the proper documents and protect your interests.
If you have questions or concerns about your retirement benefits, contact a trusted lawyer before you file for divorce. Anthem Divorce Lawyers serve clients all over the Las Vegas area. Contact us today for a consultation.
Military Retirement Benefits
The active component of the military represents about 0.5 percent of the United States population. This number increases with the Reserves and National Guard. The military is significant and so is its impact in divorce cases. Recent rule changes and court decisions impact pension division in military divorces. These changes include the:
- Frozen Benefit Rule under the Uniformed Services Former Spouses’ Protection Act (USFSPA)
- United States Supreme Court decision in Howell v. Howell, 137 S. Ct. 1400 (2017)
- Blended Retirement System
An experienced divorce lawyer will know how these recent law changes affect a military divorce. An experienced lawyer will also know the jurisdictional requirements for a military divorce. If you have questions about a military divorce, contact the experienced team at Anthem Divorce Lawyers. Located in Henderson, Nevada, we serve clients all over the Las Vegas area.
According to the Defense Finance and Accounting Service, the Uniformed Services Former Spouses’ Protection Act (USFSPA), accomplishes two things:
- It recognizes the right of state courts to distribute military retired pay to a spouse or former spouse.
- It provides a method of enforcing these orders through the Department of Defense.
A former spouse must have a court order awarding them a portion of a member’s military retired pay. Enforceable court orders under the USFSPA include:
- Final decrees of divorce
- Legal separation
- Court-ordered property settlements incident to such decrees
- Revised how military pension division orders are written.
- Imposed a single uniform method of pension division on all the states.
The Frozen Benefit Rule requires every state court order dividing military retirement as property to freeze the retired pay base and years of service on the date of the court order.
The revision amended the definition of disposable pay in the USFSPA. The benefit is frozen on the date of the court order, excluding any post-decree promotions or longevity increases. The spouse does receive the benefit of cost-of-living adjustments. The amendment reads as follows:
For purposes of subparagraph (A), the total monthly retired pay to which a member is entitled shall be-
(i) the amount of basic pay payable to the member for the member’s pay grade and years of service at the time of the court order, as increased by
(ii) each cost-of-living adjustment that occurs under section 1401a(b) of this title between the time of the court order and the time of the member’s retirement using the adjustment provisions under that section applicable to the member upon retirement.
The Frozen Benefit Rule does not impact those who obtain a divorce and property division after retirement. It primarily impacts service members going through a divorce while serving in the uniformed services. This includes:
- Air Force
- Marine Corps
- Coast Guard
- Commissioned Corps of the Public Health Service and the National Oceanic and Atmospheric Administration
- Those in the National Guard and Reserves who are still drilling
Military divorces can be complex. It is important that each spouse understands their rights and responsibilities with regard to benefit division.
The USFSPA authorizes states to treat veterans’ “disposable retired pay” as community property divisible upon divorce. Disposable retired pay does not include amounts members deduct as a result of a waiver to receive disability benefits.
In Howell, a divorced spouse lost a portion of the veteran’s retirement pay when the former veteran spouse waived the retirement pay to receive service-related disability benefits.
In Howell, the Court stated:
- A state court may not order a veteran to indemnify a divorced spouse for the loss in the divorced spouse’s portion of the veteran’s retirement pay caused by the veteran’s waiver of retirement pay to receive service-related disability benefits.
The Court continued by saying “federal law completely pre-empts the States from treating waived military retirement pay as divisible community property."
Implemented on January 1, 2018, the Blended Retirement System is a new military retirement system. It affects everyone who entered service on or after that date. Some members entering before the date could opt into the new system.
The previous retirement program is known as the legacy retirement system. The legacy retirement system requires service members to complete 20 years of creditable service to be eligible to apply for retirement.
The Blended Retirement System retains the defined benefit pension and incorporates a defined contribution component. The Blended Retirement System is designed to allow more service members to leave the military with retirement savings.
Recent law changes may not apply to all military spouses. An experienced military divorce lawyer will be aware of recent changes in legislation and how the changes apply to your case. An experienced lawyer will also understand jurisdictional requirements. Anthem Divorce Lawyers have military retirement benefit experience. Contact us today for a consultation.
Military retirement benefits are not the only benefits in a divorce. In a divorce spouses can also have private retirement plans and employer sponsored pension plans. Nevada is a community property state. This means that in a divorce, the courts will equally divide community property and debt among spouses. Retirement benefits are property divisible in a divorce.
Each retirement system can only authorize benefit division in accordance with its rules and the governing laws. The division of benefits is complex and has long-term financial consequences. An experienced divorce lawyer will understand how to identify benefit programs and the applicable laws governing their division.
QDRO stands for Qualified Domestic Relations Order. In a divorce, a QDRO is a judicial order that orders a retirement plan to pay a spouse their share of the plan. A QDRO must comply with the requirements of the specific retirement system.
Not all plans require a QDRO. A divorce decree can address the division of some plans. Other plans may require a different order to divide their benefits. IRAs and Thrift Savings Plans do not require a QDRO.
An experienced lawyer will understand the types of plans and orders necessary for their division.
An experienced lawyer can help you understand your rights and advocate your position. Anthem Divorce Lawyers have experience with military retirement benefits and QDROs. Our office is Henderson, Nevada and we serve clients all over the Las Vegas area. Contact us today for a consultation.