When a couple is in the process of obtaining a divorce, if one spouse was a member of the armed forces, it turns out a military pension may be one of the most valuable assets. But, like any asset, problems can arise during and after the divorce — especially if the marriage overlapped the time in service.
Unlike pensions attached to most other careers, there is not an age for individuals in the military to cash out. For example, this would mean that an 18 year who enlisted and served 20 years would be eligible to start to receive their pension at the age of 38.
Additionally, military pensions are worth quite a bit. For example, for a career officer, a future pension could reach well over $1 million, which is paid out for many years with annual cost-of-living increases.
For a spouse married to a person in the military, this means that in most cases, the former spouse can obtain half of the amount of the military pension that their former husband or wife accumulated during the marriage. For an officer with a pension worth $400,000, this would be quite the asset for a former spouse.
However, there are also rules built in to how the former spouse receives the pension, which can be rather complicated. For example, if the marriage overlapped the time the spouse was in the service by at least 10 years, then in the case of divorce, the benefits are sent directly to the former spouse. But, if there was not the at least 10 year overlap, then it is up to the service member to share their pension. Obviously, here is where a former spouse could run into a problem if he or she is not receiving their benefits.
Because of the complications that can arise — and the shear amount of the pension — it is advisable to talk with a family law attorney regarding your divorce, especially if you or your spouse was in the military.
Source: The Wall Street Journal, “Divorce: Splitting Up a Rich Military Pension,” Ellen E. Schultz, March 9, 2012