Big Changes To Division Of Military Retirement Benefits

John D. Hodson, CFLS, AAML

John D. Hodson, CFLS, AAML, is managing partner of Hodson & Mullin, Attorneys at Law, a six-lawyer firm with two locations in Solano County. He is a retired Air Force JAG of cer, past Chair of FLEXCOM, and current Secretary of the ACFLS Board of Directors.

By now, you are likely aware that the 2017 Department of Defense Appropriation bills from the House and Senate have passed out of the Conference Committee. The end result was passed by the House of Representatives on December 2, 2016, and (as of this writing) is expected to pass the U.S. Senate. The bill is expected to be signed by the President, although a veto is possible because it contains some controversial spending provisions as well as language that continues to thwart the closing of Guantanamo Bay.

Despite valiant letter-writing campaigns by the American Bar Association (ABA) and the American Academy of Matrimonial Lawyers (AAML), it seems that no one in the legislature paid much attention to the language tucked into the spending bill that overhauls division of military retirement benefits when a service member and spouse divorce. The Uniformed Services Former Spouse Protection Act (USFSPA), 10 U.S.C. §1408, was enacted in the early 1980s. It authorizes state courts to apply state law to divide military retirement benefits at divorce. In California and many other states, that marital interest is usually divided by applying the "time rule." Basically, a fraction is created in which the numerator represents the months of marriage during service and the denominator is the total months of service. That fraction, which determines the community percentage of the member’s overall service years, is applied to the total benefit the service member receives upon retirement. Each party is entitled to half of the resulting amount as his or her community share. Example: Husband (H) and Wife (W) are married 10 years during W’s 20-year military service career. 10/20 = 50% community property, so H’s one-half community interest is 25% of the total benefit amount.