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Are Military & Veteran benefits Considered Marital Property?

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The division of marital property can be a complicated part of getting a divorce, especially when certain government benefits are involved. For veterans, there are special rules that determine how their benefits are distributed in a divorce. Whether military or veteran benefits are divided in a divorce depends on the nature of the particular benefit. This article examines how Texas law treats military and veteran benefits in a divorce.

Veteran benefitsMilitary Retirement Benefits

A military pension can be treated as community property subject to division upon divorce. In general, property acquired during the marriage that doesn’t fit the definition of separate property is divisible at divorce. Separate property is defined as property acquired before marriage or after divorce. Property acquired during the marriage is generally considered community property unless it was received as a gift or through inheritance solely in the spouse’s name.

New federal regulations in 2017 also changed how pensions are to be divided by all 50 states. Now, the pension is frozen in time as of the date of divorce, annulment, or legal separation. It should be noted that Texas does not recognize legal separation. The purpose of the new federal law was designed to prevent an ex-spouse from receiving a higher than normal pension amount. For example, if the servicemember is an E-5 Sergeant at the time of the divorce but is an E-8 Master Sergeant at the time of retirement, the ex-spouse will receive a portion of the retirement benefit based on the lower rank. The only pension adjustments that will be allowed post-divorce is cost-of-living adjustments.

Under the Uniformed Services Former Spouses’ Protection Act, benefits that are received during marriage as disposable retired pay constitutes community property, unless received as disability benefits directly from the Veterans Administration.

Disposable retirement payis defined as the military service member’s total monthly retired pay minus:

  • Previous overpayments and legally required recoupments resulting from entitlement to retirement pay;
  • Deductions due to forfeitures of retirement pay pursuant to a court-martial;
  • Deductions resulting from the military service member’s retirement pay waiver as a condition for veteran benefits;
  • Amounts equal to retirement pay under Title 10, Chapter 61 of the U.S. Code; and
  • Elected deductions pursuant to Title 10, Chapter 73 of the U.S. Code used for an annuity to a spouse or former spouse to satisfy certain court orders under Title 10, Section 1408 of the U.S. Code.

Combat-Related Special Compensation

Sometimes a military member will receive Combat-Related Special Compensation (CRSC) in place of full retired pay. CRSC is a program to compensate military retirees who have incurred certain combat-related disabilities. CRSC payments are considered to be the separate property of the veteran.

Veterans Administration Disability Compensation

VA disability compensation benefits are not subject to division upon divorce. Such benefits are treated as a special gratuity to the veteran for service-connected disabilities as compensation for personal injuries or illnesses incurred in connection with military service. Due to the personal nature of these benefits, they are treated as the veteran’s separate property and are therefore not subject to division at divorce.

If a divorce decree generally grants a spouse part of all military retirement pay without specifying VA disability benefits, Texas courts have held that the order does not cover the military service member’s VA disability benefits which were received in lieu of some of his military retirement pay.

Consult Coker, Robb & Cannon

Due to special rules regarding the division of retirement benefits, divorces that involve military and veteran benefits can be particularly challenging to sort out. Whether you are a military service member or their spouse, you should consult an experienced attorney from Coker, Robb & Cannon, Family Lawyers to help make sure your property is properly divided according to law.

To schedule an appointment with one of our skilled attorneys, call us at F:P:Site:Phone} or contact us online today.

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