Property division is frequently the most challenging part of any divorce. Couples frequently disagree on what is fair and appropriate. The more valuable assets are, the more likely spouses may be to fight over those assets.
A military pension earned after years of service is one of the most valuable benefits of a military career. Service members who qualify for pensions can use the payments they receive to ensure a comfortable standard of living during their golden years. Both the service member and their spouse may have expected to rely on that pension for financial stability during retirement.
Is a military pension potentially at risk of division when couples divorce?
Pensions are potentially divisible
Retirement savings and pensions are not the separate property of one spouse. While only one spouse may technically have their name on the account, the amount earned during the marriage is theoretically subject to division when couples divorce.
People sometimes believe that military rules govern the division of pensions, but that isn’t actually the case. Instead, state laws where the spouses file for divorce determine how they split their property. Military rules only govern the exact way in which spouses distribute the pension. Couples that have resided in Indiana for at least six months are subject to the state’s equitable distribution rules when either of them files for divorce.
Splitting the pension or accounting for its value is likely necessary during a divorce in Indiana. Military rules only influence how spouses address the pension. The 10/10 rule applies in cases where the property division settlement requires the distribution of the pension.
If the marriage lasted for at least 10 years and the serving spouse had 10 years of qualifying service during the marriage, then the non-military spouse can receive direct pension distributions from the Defense Finance and Accounting Service (DFAS). Otherwise, the spouses may have to make alternate arrangements to factor the pension into the property division settlement. There are many solutions possible, especially in scenarios where spouses work cooperatively to pursue an uncontested divorce.
A military pension can be a critical consideration during property division negotiations. Learning more about property division rules and special standards that apply to military divorces can be beneficial for service members and their spouses.