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Supreme Court rules on military divorce benefits

One of the most complex family law matters is dividing assets in a military divorce, which falls under Federal and California law. The Supreme Court ruled this month that states cannot raise a former spouse's retirement pay to compensate for losing benefits caused by waving disability payments.

The Arizona couple divorced in 1991, and they agreed that the wife was entitled to half of the former husband's military retirement pay, when it took effect. He started receiving retirement pay two years later after he left the Air force.

He later qualified for monthly VA benefits for a service-related disability. By electing to receive these benefits though, he waived an equal amount of retirement pay to avoid receiving duplicative benefits or double dipping. This also led to a monthly decrease of $127 in the retirement benefits that were to his wife.

Arizona's state Supreme Court ultimately ruled that the former wife was entitled to the lost benefits. It found that federal and Arizona law prohibit her from having a vested right in payments, even though the veteran elected to waive retirement pay.

However, the Supreme Court reversed. It ruled that the Uniformed Services Former Spouses Protection Act is superior to and preempts the Arizona court's order for the husband to pay his wife the portion of retirement proceeds that were reduced by his choice of disability pay.

Under federal law, according to the Court, a state may treat military retirement pay as community property, which may be divided at the time of divorce. But, the portion of the pay that is later reduced cannot continue to be treated as community property.

The Court recognized that federal law and its ruling complicates property division for former military spouses. It pointed out that state courts could account for the possibility that a veteran may waive part of their retirement pay in favor of military benefits or recalculate spousal support based on later changes.

An attorney can assist spouses with these complex military divorce issues. A lawyer can help assure that a property settlement or decree reflects these types of eventualities.

Source: Courthouse News Service "Justices clarify benefits in military divorce case," Kevin Lessmiller, May 15, 2017

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