Military retirement has become an area that is very complex. Many times a service member is either entitled to military retirement pay, and/or VA disability pay. In the case of VA disability pay, same cannot be divided with a spouse in a dissolution proceeding, whereas regular military retirement pay can be divided. We often see the military member claiming disability pay, for tax purposes, and for the reason that it cannot be divided with a spouse. It reduces the regular retirement pay that can be divided between the service member and spouse. This can have a dramatic effect upon how one should proceed with a dissolution proceeding regardless of whether you are the military member or the spouse of a military member. Although Congress did enact legislation in the early 2000’s to restore full retirement pay to a service member, with the member receiving full VA disability pay. This law is being phased in and will not be fully implemented until year 2014. As a result we still have the issue referred to above.
Some non military spouses have taken the position that if their portion of a spouses military retirement pay is reduced by the service member claiming part of same to be disability pay, that they should be indemnified through other assets in the dissolution for that loss. The Arizona State Legislature has specifically addressed the issue and indicated that the Court cannot indemnify a non service member spouse for any loss of interest in a service member’s retirement pay. In addition the State Legislature has indicated that, for purposes of determining spousal maintenance that the Court cannot take into effect any income received via disability benefits.
We also often hear clients or potential clients stating that their spouse had not been in the military for ten (10) years during the parties’ marriage and as a result, they are not entitled to any potential retirement benefits. This is incorrect, although the payment is different. The military will not honor an Arizona court order for direct payment to a former spouse of his or her portion of the service member’s retirement account, unless the parties have been married ten (10) years and there are ten (10) years of military service during the marriage. If, however, these two (2) requirements are not met, the former spouse is still entitled to his or her one half community share in the military member’s retirement account, assuming the military member qualifies for retirement pay. It is just that the military will not make the payment to the former spouse, the military member must make the payment to the former spouse, by Arizona court order.
The above are just a few of the issues that are popping up with regard to the “military divorce”. There are other issues with regard to military retirement, which should be discussed with a family law attorney well versed in the subject. If you have any additional questions regarding military retirement, or any other family law question, and you would like to schedule a free thirty (30) minute in office consultation, please do not hesitate the fill out the Free Initial Consultation section on the home page, or, call my office at 602-404-9733.