Members of the uniformed services who provide qualifying service may earn a military pension. In some cases, a veteran’s military pension can become a marital asset subject to division in a Maryland divorce. But dividing a military pension involves a different process compared to dividing pension benefits from civilian employment. When you get divorced in Maryland, knowing how federal and state law affects the division of military pensions can help you preserve your financial rights.
Maryland Uses the Equitable Distribution Rule
In divorce cases, Maryland divides marital property according to the equitable distribution rule. Under this rule, Maryland courts must divide marital property fairly between spouses, based on the court’s consideration of factors such as the length of the marriage, each spouse’s contributions to acquiring and maintaining the property, the spouses’ respective financial circumstances and earning capacities, and any spousal support obligations. However, dividing marital property fairly does not necessarily mean that a court will divide property evenly or 50/50.
Pension benefits, including civilian and military pensions, earned during a marriage qualify as marital property subject to division. However, unlike other marital property such as real estate, a Maryland court does not transfer title in a pension benefit from one spouse to another. Instead, the court issues a monetary award entitling one spouse to a portion of the other spouse’s pension benefits.
How Federal Law Governs the Division of Military Pension Benefits
The Uniformed Services Former Spouses’ Protection Act codified the right of state family courts to treat military pension benefits as divisible marital property. However, the Act does not require states to do so. The Act does not automatically entitle a spouse to a portion of their former spouse’s military pension if applicable state law permits division. Instead, couples must negotiate the division of a marital pension as part of a divorce settlement, or the state court must decide whether to divide a military pension and how much of the marital portion of the pension to award to the non-military spouse.
Furthermore, federal law allows a veteran to waive a portion of their military pension to receive VA disability compensation. The law does not allow state divorce courts to treat these waived pension benefits as retired pay eligible for division.
The 10/10 Rule
The 10/10 Rule allows a non-military spouse to receive direct payments from their former spouse’s military pension benefits if they meet certain criteria. Under the rule, the Defense Finance and Accounting Service, which manages military pension payments, can make direct payments of a divided portion of a military pension to a non-military spouse if:
- The parties’ marriage lasted at least ten years, and
- At least ten years of the parties’ marriage overlapped with ten years of the military spouse’s creditable service.
Calculating the Marital Share
When dividing military pension benefits, Maryland courts must calculate the marital portion of the service member’s or veteran’s pension, usually by dividing the creditable time that occurred during the marriage by the service member’s total creditable time. From there, courts can then determine what portion of the marital share to award to the non-military spouse.
The Survivor Benefit Plan
The Survivor Benefit Plan (SBP) ensures continued pension benefits for a veteran’s beneficiary, such as a spouse. However, the SBP has different beneficiary categories for current and former spouses but does not automatically change the designation upon a couple’s divorce. Instead, the service member or veteran must elect to change their beneficiary designation in favor of their former spouse within one year of the divorce decree to maintain the former spouse’s eligibility for benefits. If they do not, the former spouse can make a deemed election by submitting a copy of a divorce settlement or court decree.
Contact Our Military Family Law Attorneys Today
Dividing a military pension can involve specialized rules and restrictions compared to a civilian employment pension. Contact Patriots Law Group today for a confidential consultation with a military family lawyer to learn more about the rules governing the division of military pension benefits in a Maryland divorce and to get help protecting your financial interests when you and your spouse separate.