One of the more complicated divorce issues that arise in Nebraska divorces is when a military service member is divorcing and they have a retirement pension that is part of the marital estate. The division of these pensions becomes even more complicated when the servicemember receives disability pay when they retire that may reduce the retirement pay.
Contrary to some servicemembers’ belief, disposable retired military pay is divisible property in a divorce under the Uniformed Services Former Spouses’ Protection Act.[i] Although DFAS may not directly pay a spouse directly under 10/10 rule if the spouse was married to the servicemember for less than 10 years, courts can divide retirement with fewer than 10 years of marriage. For active duty members, the years of service for which the member was eligible to receive active duty pay used.[ii] For reservists, a creditable year is any year in which the member accrued at least 50 points. [iii]
When retirement approaches, military pensions are often divided with a coverture formula. A coverture formula can be best described as the fraction in which a pension is divided, wherein the numerator (top number) is the months of marriage and the denominator (bottom number) is the months of service.
Typically, a member in the military could also receive some form of disability benefits upon retirement. Depending on the situation, the disability benefits could reduce the value retirement pensions. In this situation, that reduction will directly impact the value of a former spouses share in retirement.
Under federal law, if disposable retired pay is reduced by the veteran’s election of disability benefits, the state court may not order a veteran to indemnify a former spouse for the loss of a former spouse’s share of the veteran’s retirement pay caused by the veteran’s election to separately receive disability benefits
However, in Nebraska, a former spouse will often seek a reservation of alimony to protect her interest in the military pension against the situation where her share in the pension could be reduced by a veteran receiving a disability, since Federal law prevents a former spouse from receiving a share of any disability benefits. This reservation could take the form of a separate “Special Alimony” provision in which a nominal amount, like $1 per year can be awarded. This low dollar amount is designed in order to allow a Court in the future the ability to modify an alimony award to reflect a change of circumstances, such as a loss or reduction of benefits related to a disability.
While a Nebraska court may not include service-connected disability benefits awarded to a military retiree as a part of a marital estate, it may consider such benefits and the corresponding waiver of retirement pension benefits required by federal law in determining whether there has been a material change in circumstances which would justify modification of an alimony award to a former spouse. [iv]
If you are a military member or a spouse of a military member, it is important to understand these issues and hire an attorney who has had experience in military divorces.
Goosmann Law – Omaha Divorce Lawyer and Omaha Child Custody Lawyer
If you are a military member or a military spouse in Omaha or Bellevue, Nebraska, the Omaha divorce lawyers at Goosmann Law are available to discuss the specific facts about your situation and can provide an initial case assessment during an initial consultation. You can schedule a consultation by contacting your local Goosmann Office at (855) 909-4442 or by filling out the contact form on our website https://www.goosmannlaw.com/contact-us/.
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About Goosmann Law
https://www.goosmannlaw.com/services/divorce-family-law/*Note: This blog post is for informational purposes only and should not be construed as legal advice or relied upon in lieu of obtaining legal advice regarding the exact particulars of your individual situation in this very complex and difficult area of Nebraska law.
[i] 10 U.S.C. § 1408(c)(1)
[ii] 10 U.S. Code § 1405.
[iii] 10 U.S. Code § 12732(b)(2).
[iv] Parish v. Parish, 314 Neb. 370 (2023)