Even the most congenial divorces are never easy -- and if you're a member of the military divorcing a civilian spouse who has followed you around the country (or world) through several tours of duty, this process can become even harder. Depending upon the state in which you're residing while seeking a divorce, you may find yourself on the hook for alimony or even a portion of your military pension. What can you do to minimize the financial impact of divorce on your life and career? Read on to learn more about how the "ten-year rule" can impact the division of your assets, as well as some tactics you may be able to use to negotiate a more favorable settlement.
What happens to your military marriage after ten years?
For most other government (and even private sector) employees, retirement accounts are handled on an individual basis. Often, unless one spouse has a sizable retirement account and the other will be left destitute during his or her golden years, divorce courts are reluctant to split these assets. The dwindling number of employees with private sector pensions also aren't usually required to split these pensions with an ex-spouse, even if alimony or other spousal support payments are ordered.
However, because the military lifestyle often makes it difficult for a civilian spouse to create and maintain a high-earning career, the government has put provisions in place to protect these individuals following a divorce from a service member. Defense Finance and Accounting Services (DFAS), the agency responsible for setting the amount of (and administering) your pension, may legally sign over half of your military pension to your ex-spouse each month if you and your ex-spouse were married for at least 10 years overlapping with ten years or more of military service. This means that if you've been basing your retirement plans on a specific dollar amount of pension earnings, you may need to push back your retirement date by several years or "retire" into another job.
What can you do to reach a more favorable settlement?
If your marriage has passed the ten-year mark and your ex-spouse will be entitled to your pension, there are a few things you may be able to offer to tilt the odds back into your favor. While the passage of ten years in a military marriage does permit trial courts to order a split of the military pension, this isn't an automatic process -- and by giving up other marital assets, you may be able to keep a larger percentage of your pension or even avoid paying any out at all.
If you've been paying the maximum amount in Social Security tax for a good portion of your career, your ex-spouse should be able to claim Social Security on your earnings, rather than his or her own -- often obviating the need for a pension. You may also be willing to give up home equity or a private retirement account in favor of your ex-spouse so that your pension benefit can continue to accrue.
For further assistance, contact local military divorce law professionals, such as those from Law Offices of Peter Napolitano & Wayne Hibbeler.