Military: How Will It Affect My Divorce? |
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Being
a member of the military, or a military spouse can greatly affect your
divorce, especially if there is a potential for military retirement.
There are many aspects to every divorce case, and it is important to
recognize that every case is different.
In Colorado,
the parties to a divorce (you and your spouse) are required to provide
full financial disclosure to one another, which means that you need to
tell your spouse about all of your assets and all of your debts, even
if they are joint. I've noticed on a number of occasions though that
military members and spouses do not always know about or remember to
include all of their military benefits in their disclosures. Important
items to include are:
- Leave and Earnings Statement (LES):
This shows your base pay, BAH, BAS, bonuses, combat pay, etc. Nearly
all of the allowances and bonuses are included when calculating child
support, so it is important to have an accurate accounting of what is
actually being received by the service member. The LES also shows the
amount of SGLI coverage and the amount of the pay that is being
diverted into TSP.
- Military Retirement Statement:
If a service member has already retired, then it is important to have a
copy of the military retirement statement. Generally, the retiree will
only receive these statements quarterly, unless there is a change in
the amount received. . This shows the amount received monthly by the
retiree. It will also show if the retiree has enrolled in and is
paying for the Spouse Benefit Protection (SBP). Generally, a divorcing
spouse is entitled to receive a percentage of the military retirement,
if the marriage overlapped with the retiree?s time in service. The
percentage that the former spouse is entitled to will differ depending
on the total number of months that the retiree had in the service, and
the total number of months of the marriage that overlapped with that
service.
- Spouse Benefit Protection vs. Life Insurance:
SBP is a program which the retiree elects to pay for that will provide
the spouse with continued benefits after the service member?s death.
In a divorce case where the former military spouse is entitled to
receive benefits, the spouse will often pay the premium for the SBP.
Another option that is available to protect the former spouse?s
benefit, is for the former spouse to purchase a life insurance policy
on the service member. This is often more cost-effective for the
parties, because the parties can obtain greater coverage for a lesser
premium. However, this is not always a good option for parties where
it will be difficult for the service member/retiree spouse to pass the
physical exam required for the life insurance coverage; or in cases
where the premium for the life insurance policy will be higher than the
cost of SBP.
- Service Member?s Group Life Insurance (SGLI) and Family SGLI:
This is a benefit often overlooked by the parties to a divorce.
Obviously a former spouse of a military member will no longer be
eligible for coverage under the Family SGLI. However, if the military
member is the person paying spousal maintenance or child support, they
are often required to maintain life insurance to secure that
obligation. SGLI is a viable option for securing that obligation and
is often much cheaper than civilian life insurance policies. If a
service member is not obligated to maintain this policy with the former
spouse as a beneficiary to secure child support or maintenance
obligations, then it is important to remember that the beneficiary of
the policy will not automatically change at the time your divorce
decree enters, and if you do not want to have your former spouse as the
beneficiary after the conclusion of the divorce, you must execute a new
Election Certificate. It is also important to update your will and any
other life insurance policies that may be affected by your divorce.
Once a divorce is filed, you cannot change these items until the decree
has entered.
- Thrift Savings Plan (TSP):
Since contributions to TSP come directly out of the service member?s
pay, they often forget that they have this. Soldiers who served combat
tours may have made significant contributions to TSP, and generally TSP
is considered a marital asset, if the contents were contributed during
the marriage or if there has been an increase in the value during the
marriage.
- TriCare:
Civilian medical insurance is expensive. Often it is important for
divorcing couples to recognize the impact that acquiring civilian
medical insurance will have on their divorce. Spousal maintenance is
awarded based on the receiving party?s need versus the paying party?s
ability to pay. Usually the receiving party?s need will greatly
increase once they are no longer eligible for TriCare. In cases where
the marriage overlapped the military service by at least 15 years will
allow the former spouse to maintain TriCare for one year; where the
overlap is 20 years or more, the former spouse will have lifetime
coverage with the payment of a small premium each year. If the overlap
is less than 15 years, there is no provision for the former spouse to
maintain coverage. Some couples will consider a legal separation in
this case, so that the spouse can continue receiving the medical
coverage.
This
is a general overview of potential items that are often overlooked in a
military divorce. Every divorce is unique and some of these items may
apply to your situation, and some may not. Ensuring that you have all
of the information about which items do apply to your case will help to
ensure that you obtain a fair settlement or a fair ruling by the Court
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