Military Service: How it Can Impact Your Divorce in Orange and Los Angeles Counties – Part 2

The process of getting divorce can be hard under any circumstance. However, when one of the parties is on active-duty military service an additional level of complexity arises. This is a two-part blog series that addresses the issues that can make a military service divorce particularly problematic.

In part one of this series, we discuss the issues of determining the correct jurisdiction, perfecting service of process, and specific obstacles that can arise due to a person’s military service. In part-two we will address specific provisions that address how being a servicemember can impact how a divorce settlement is handled in a community property state such as California.

If you are planning to handle your divorce without an attorney, it is important that you understand how the federal laws can affect your divorce. What follows is a walk through the places where military status changes the math, the timeline, or the paperwork in a contested divorce filed in Orange or Los Angeles County.

Disclaimer: This blog constitutes general information and is not legal advice. This platform is not a law firm, and its employees, agents, or representatives are not acting as your attorney. The content and tools offered are intended to assist individuals in understanding and navigating the divorce process without an attorney but are not a substitute for advice from a qualified attorney licensed in your jurisdiction. To allow you to independently verify information, wherever a fact appears below, you'll find a link to the statute, court rule, or source behind it.

Community Property Laws

If a divorce proceeding involving active-duty military personnel is held in a California family court, the laws of the state apply. This is codified under the California Family Code § 760, supported by Family Code § 2550 for equal division. The basic provision of these laws provide:

• Equal Split: Courts must divide the community estate 50/50 upon divorce or legal separation. CA Fam Code § 760 defines community property as all real or personal property acquired during the marriage. This system dictates that assets and debts acquired during marriage belong to both spouses equally
• Separate Property: Items owned before marriage, or received via individual gift or inheritance, stay separate

However, the federal statutes can provide important distinctions that will impact this distribution of assets.

What Happens to Military Retirement Benefits in a Divorce?

Military retirement benefits are coveted because they provide an immediate, government-backed lifetime pension after just 20 years of service—along with ultra-low-cost comprehensive healthcare, annual cost-of-living adjustments, and valuable tax-free base perks that are rare in the modern private sector.

In a community property state such as California, the spouse is entitled to a share of these benefits subject to restrictions.

There is no federal law that automatically entitles a former spouse to a portion of a member’s military retired pay. A former spouse must have been awarded a portion of a member’s military retired pay in a state court order.

The controlling federal statute that impacts a divorce proceeding in California is The Uniformed Services Former Spouses' Protection Act (USFSPA), 10 U.S.C. 1408, which accomplishes two important things:

1. It authorizes (but does not require) State courts to divide military retired pay as a marital asset or as community property in a divorce proceeding.
2. It provides a method of enforcing these orders through the Department of Defense. Retired pay as property payments is prospective only. Retired pay arrears cannot be collected under the USFSPA

Court orders enforceable under the USFSPA include final decrees of divorce, dissolution, annulment, and legal separation, and court-ordered property settlements incidental to such decrees. The pertinent court order must provide for the payment of child support, alimony, or retired pay as property, to a former spouse.

There are a number of provisions in this law that can seriously impact how much and for how long a spouse is entitled to receive even in a 50/50 community property state such as California.

How Do Courts Calculate the Amount Due a Spouse From Military Retirement Benefitsin a Divorce?

Divorce while on Active Duty: This provision of the USFSPA does not really impact the amount given to a spouse as it dovetails the state law that says after the date of separation, anything earned belongs solely to the individual who got it.

The USFSPA effectively provides the same remedy - For active-duty members divorcing before retirement, the "frozen benefit rule" calculates the former spouse's share based on the rank and years of service at the time of divorce, not at final retirement. However, one rather significant impact this rule has on a military pension is the retired pay figure calculated as though the member had retired on the date of the divorce decree itself, using that date's rank and years of service, rather than the larger, later paycheck the member may eventually draw after promotions or additional years in uniform.

Calculation of Retirement Benefits: Even in community property states like California, the divorcing spouse may not receive a true 50% of the retirement benefits. Under the USFSPA the maximum amount the federal government will only pay is 50 percent of the service member’s disposable income. This is an important distinction as the spouse will not receive 50% of the total retirement benefit. Before the 50% share is calculated the following are deducted from the monthly pension:

1. Amounts owed to the United States for previous overpayments of retired pay and for recoupments required by law resulting from entitlement to retired pay.

2. Forfeitures of retired pay ordered by court-martial.

3. Amounts of retired pay waived to receive compensation under Title 5 (federal civilian employment) or Title 38 (Department of Veterans Affairs) of the United States Code.

4. The amount of the member's retired pay under 10 U.S. Code Chapter 61 (Retirement or Separation for Physical Disability) computed using the percentage of the member's disability on the date when the member was retired (or the date on which the member's name was placed on the temporary disability retired list).

5. Premiums paid because of an election under 10 U.S. Code Chapter 73 (Survivor Benefit Plan) to provide an annuity to a spouse or former spouse to whom payment of a portion of such member's retired pay is being made pursuant to a court order.

Impact of Alimony and Child Support

Alimony and child support payments including any amounts in arrears are covered under both USFSPA and Title 42 of the United States Code Section 659 (42 U.S.C. § 659), to enforce current child support, alimony, as well as child support and alimony arrears orders.

An important item to note is that the amount that can be paid out is capped at 65 percent of the member’s disposable income.

Death of the Military Former Spouse

The death of the military spouse dramatically impacts pension payout, and this payout plays out differently than where the spouse was employed in the private sector.

• Private Sector Pension: If a former spouse had a legally recognized community property share in a pension (via a finalized divorce decree and a Qualified Domestic Relations Order (QDRO)), that share is protected. If the earning spouse dies, the ex-spouse generally continues to receive their awarded portion of the pension or designated survivor benefits, provided the QDRO was already approved and filed
• Military Pensions: When a military service member dies, USFSPA payments going to a former spouse will stop. If the former spouse dies, payments will also stop. Former spouse payments cannot be passed on to a third party such as a beneficiary under a will when a former spouse dies.

The 10/10 Rule – How You Will Be Paid

California, as a community property state, generally divides the marital share of that pension using a time-rule formula tied to years of marriage overlapping years of service. USFSPA provides that they will only pay the former spouse directly if there is ten years of overlapping marriage and service. If the former spouse cannot meet this 10 year criteria, they are still entitled to their share of the pension, except they must collect it directly from the member rather than through DFAS's payment system.

Healthcare Insurance after the Divorce

Private Sector Divorces- In the private sector ongoing medical insurance and out-of-pocket care obligations are factored into support calculations, separate replacement policies, or specific court orders. Since Federal and state laws dictate that an ex-spouse cannot remain on an employer-sponsored health plan once a divorce is finalized. Coverage typically ends the first day of the month following the dissolution. However, the cost of health insurance premiums and uninsured medical expenses for both adults and children are factored directly into calculations for spousal support and child support.

Military Divorces - TRICARE is the official health care program of the United States Military Health System. TRICARE eligibility for a spouse ends automatically on the date of divorce, full stop, unless the marriage clears a specific threshold.

• 20/20/20 rule, an unremarried former spouse keeps full TRICARE coverage for life if they meet the following criteria
• Your sponsor has at least 20 years of creditable service toward determining retirement pay.
• You were married to the same sponsor or service member for at least 20 years.
• All 20 years of marriage overlap the 20 years of creditable (active or reserve) service that counted toward your sponsor’s retirement.

The coverage will end if you:

• Remarry, even if the remarriage ends in death or divorce (unless you gain eligibility under your new spouse)
• Purchase and are covered by an employer-sponsored health plan
• Were the former spouse of a NATO or Partners for Peace nation member

Miss any one of those three “20s” and the calculus changes fast.

A different “20-20-15” Rule applies where unremarried former spouses keep the Tricare coverage for only one transitional year if they meet the following criteria:

• 20: Their sponsor has at least 20 years of creditable service toward determining retirement pay.
• 20: They were married to the same sponsor/service member for at least 20 years.
• 15: Fifteen of those years overlap the 20 years of creditable (active or reserve) service that counted toward their sponsor’s retirement.

After that, the only option is the Continued Health Care Benefit Program, a premium-based bridge plan a former spouse has to purchase directly rather than receive automatically. For marriages that miss both thresholds, TRICARE coverage simply ends, and the former spouse is on the open market or an employer plan from the day the judgment is entered.

The coverage will end in either scenario if you:

• Remarry, even if the remarriage ends in death or divorce (unless you gain eligibility under your new spouse)
• Purchase and are covered by an employer-sponsored health plan
• Were the former spouse of a NATO or Partners for Peace nation member

Take Note of what Terminology you use.

The legal profession is an exacting profession and the words being used often need to be exacting. One area that many military divorces get wrong is the Thrift Savings Plan (TSP), often with dire consequences.

The TSP is a retirement savings and investment plan for federal employees and members of the uniformed services. It functions just like a private sector 401(k), offering automatic payroll deductions, tax-deferred or Roth options, and government matching contributions up to 5%.

TSP accounts aren't divided by a Qualified Domestic Relations Order, the term everyone reaches for out of habit. They're divided by a Retirement Benefits Court Order, a specific instrument that has to expressly reference the Thrift Savings Plan by name and award either a fixed dollar amount or a percentage as of a stated date, according to the TSP's own explanation of divorce, annulment, and legal separation. Send in a generic QDRO template built for a private-sector plan, and the TSP's Court Order Center will typically reject it, which can delay the whole division by months while the paperwork gets fixed.

Once the TSP receives a valid order, federal regulations require the account to be frozen, meaning no new loans and no withdrawals, until the award is paid out or the order is otherwise resolved, a rule spelled out in the Code of Federal Regulations governing court orders against TSP accounts.

Divorce is Hard – Military Divorces are Harder

The lesson that should be taken from this two-part series about divorces involving a military service member is that there are special rules and procedures that need to be adhered to to ensure that you receive all that you are entitled to receive.

We understand that the divorce process with its unique rules and jargon can be confusing. DivvyLaw wants to be a conduit to allow you to better understand and navigate family law issues in Los Angeles and Orange Counties. If you would like to be notified of upcoming blogs and be put on a wait list for access to a revolutionary solution, click on the link below and you will be added to our list.

The standard closing, and an earned one given the subject: this piece is general information with sources you can check, not legal advice about your marriage, your money, or your case.