Dividing Military Retired Pay Benefits In Divorce

military retirement divorce

Dividing Military Retired Pay Benefits In Divorce

military retirement divorce

The Uniformed Services Former Spouses’ Protection Act (USFSPA) was passed by Congress in 1982, specifically to give a state court the authority to treat military retired pay as marital property and divide it between the spouses. This legislation was in direct response to the preceding year’s U.S. Supreme Court decision in McCarty v. McCarty, wherein the court precluded state courts from dividing military retired pay as an asset of the marriage.

While military retired pay is not divisible using a Qualified Domestic Relations Order  (“QDRO”), it is divisible using a Military Retired Pay Division Order.

The Defense Finance and Accounting Service (“DFAS”) has very specific rules about how and when military retirement pay can be divided.  For a division of retired pay as a property award to be enforceable under the USFSPA, the former spouse must have been married to the service member for at least 10 years, and during that time the service member must have performed at least 10 years of creditable service. This is referred to as the 10/10 requirement.

In addition, no more than 50% of retired pay can be awarded as marital property. Because the DFAS has very specific requirements relative to division of military retired pay, it is important that the parties understand these technical requirements early on. There are many ways that a former spouse can lose his or her right to division of retired military pay, so relying on an expert in this unique area is very important.

Military Retirement Divorce

Source: Dividing Military Retired Pay Benefits In Divorce | Robert Hetsler,J.D. CPA,CVA,CFF,FCPA,MAFF,CMAP,PFP | LinkedIn

Dealing with Divorce

dealing with divorce

Dealing with Divorce
dealing with divorceDivorce can be a lengthy process that may strain your finances and leave you feeling out of control. But with the right preparation, you can protect your interests, take charge of your future, and save yourself time and money. You certainly never expected divorce when you cut the wedding cake–you and your spouse planned on spending the rest of your lives together. Unfortunately, the fairy tale didn’t work out, and you’re headed for a divorce. So where do you begin?

First things first: should you hire an attorney?

There’s no legal requirement that you hire an attorney when divorcing. In fact, going it alone may be a sensible option if you’re young and have been married only a short time, are childless, and have few assets. However, most divorcing couples hire attorneys to better protect their interests, even though doing so can be expensive. Divorce attorneys typically charge hourly rates and require you to submit retainers (lump sums) up front. The charges will depend on the complexity of the case, the reputation and experience of the divorce attorney, and your geographic location.

You should know that if you’re a homemaker or earn less income than your spouse, it’s still possible to obtain legal representation. You can submit a motion to the court, asking a judge to order your spouse to pay for your attorney’s fees.

If you and your spouse can agree on most issues, you may save time and money by filing an uncontested divorce. If you can’t agree on significant issues, you may want to meet with a divorce mediator, who can help you resolve issues that the two of you can’t resolve alone. To find a mediator, contact your local domestic relations court, ask friends for a referral, or look in the telephone book. Certain attorneys, members of the clergy, psychologists, social workers, marriage counselors, and financial professionals may offer their services as mediators.

Save time and money by doing your homework before meeting with a divorce professional

To save time and money, compile as much of the following information as you can before meeting with an attorney or other divorce professional:
• Each spouse’s date of birth
• Names and birthdates of children, if you have any
• Date and place of marriage and length of time in present state
• Existence of prenuptial agreement
• Information about parties’ prior marriages, children, etc.
• Date of separation and grounds for divorce
• Current occupation and name and address of employer for each spouse
• Social Security number for each spouse
• Income of each spouse
• Education, degrees, and training of each spouse
• Extent of employee benefits for each spouse
• Details of retirement plans for each spouse
• Joint assets of the parties
• Liabilities and debts of each spouse
• Life (and other) insurance of each spouse
• Separate or personal assets of each spouse, including trust funds and inheritances
• Financial records
• Family business records
• Collections, artwork, and antiques

If you’re uncertain about some of these areas, you can obtain the necessary information through your spouse’s financial affidavit and/or the discovery process, both of which are mandated by the court.

Consider the big questions, such as child custody and alimony

Although your divorce professional will help you work through the big issues, you might want to think about the following questions before meeting with him or her:
• If you have children, what are your wishes regarding custody, visitation, and child support?
• Whose health insurance plan should cover the children?
• Do you earn enough money to adequately support yourself, or should alimony be considered?
• Which assets do you really want, and which are you willing to let your spouse keep?
• How do you feel about the family home? Do you feel strongly about living there, or should it be sold or allotted to your spouse?
• Will you have enough money to pay the outstanding debt on whatever assets you keep?

In addition to an attorney, you may want to see a therapist to help you clarify your wishes, express yourself more clearly, and deal with any child-related issues. Such counseling is typically covered by health insurance.

Some dos and don’ts when divorcing

Keep the following tips in mind:
• Do prepare a budget and a financial plan to sustain you until your divorce is final. Get help if you don’t currently have the skills and energy to do this on your own.
• Do review monthly bank and financial statements and make copies for your attorney.
• Do review all tax returns that have been filed jointly or separately by your spouse.
• Do make sure all taxes have been paid to date.
• Do review the contents of any safe-deposit boxes.
• Do get emotional support for yourself–talk to friends, join a support group, or see a therapist.
• Don’t make large purchases or create additional debt that might later cause financial hardship.
• Don’t quit your job.
• Don’t move out of the house before consulting your attorney.
• Don’t transfer or give away assets that are owned jointly.
• Don’t sign a blank financial statement or any other document without reviewing it with your attorney.


Source: Investments


legal separation

legal separationWhile most divorcing spouses are laser-focused on the date their divorce will become final, many underestimate the importance of their date of separation. Often these two dates occur months – or even years – apart. Yet, the date of separation can have a dramatic impact on many financial aspects of the divorce.

The date of legal separation is generally considered the date the spouses no longer lived together as a married couple, although each state may slightly vary this definition. The date of separation is often obvious – either one party moves out of the marital home or the parties agree to a set date, sometimes the court must make the determination.

So why is the date of separation so important?

Barring any prenuptial agreements or state law to the contrary, the income earned by a spouse during the marriage is considered marital property, subject to division between both spouses. However, any income earned by either spouse after the date of separation is generally treated as separate property. This means that if one spouse wins the lottery or receives a large bonus before the date of legal separation, the other spouse is entitled to a portion of that income.

Things can get complicated if one spouse receives income after the date of separation but before the date of divorce. In those cases, the courts will look to when the received income was earned to determine if it is marital property. In some cases, even money received after the date of legal separation but earned before that date will be subject to division.

Finding Hidden Assets In Divorce

hiding assets

assetsOne of the unfortunate realities in many divorces is that one spouse will attempt to hide assets from the other to avoid having to divide them down the road. This is particularly problematic for the “non-financial” spouse – the one who took a hands-off approach to involvement with the couple’s finances during the marriage.

These non-financial spouses usually will not understand or have immediate access to records or documents related to marital property like investment accounts, real estate holdings, business interests and the like. Not having any information on marital assets can make it very challenging to ensure that the non-financial spouse receives a fair share of the marital estate.

If you are a non-financial spouse facing a divorce, your first priority should be identifying and locating documents related to all marital assets. While sometimes you can get this by simply asking your spouse, usually the spouse intent on hiding assets will delay or refuse outright.

In these cases, you or your attorney will need to rely on the legal process to obtain financial information from the unwilling spouse. In legal jargon this is referred to as the “discovery process” and can become a complicated and costly affair. However, it is one of the most effective ways to compel an unwilling spouse to turn over financial records.

Even after you receive the requested information, another problematic situation arises when the unwilling spouse has an ownership interest in a privately held business. In these cases, you will usually need the help of a forensic accountant to study the financial statements and records of the company to determine an appropriate value for the business and identify any unusual transactions that suggest assets are being hidden.

For any non-financial spouse experiencing the issue of hidden assets in a divorce, it is important to seek out the advice of an experienced divorce attorney or forensic accountant who can provide advice on the best course of action, depending on your circumstances.

Source: Divorce Transitional Support Advisor – Finding Hidden Assets In Divorce

Who gets divorced in America

who gets divorced in america

The groups that are most likely to get divorced in Americawho gets divorced in america

There’s this persistent myth in America that about half of all marriages end in divorce.

In fact, the figures are significantly lower, as new graphics by Nathan Yau of Flowing Data demonstrate.

Yau explains that this myth simply stems from bad math – dividing the divorce rate by the marriage rate in a given year. In 2014, there were 8.7 divorces and 17 marriages per 1,000 women in the United States, he says, citing figures from the American Community Survey. If you divide the first number by the second number, you get 51 percent.

The problem is that the people who are marrying each other in 2014 aren’t the same as the people who are divorcing each other in 2014. If you look at the data over a longer period of time, it becomes clear that the divorce rate is lower than half.

As Claire Cain Miller wrote at the Upshot, the divorce rate peaked in the 1970s and early 1980s and has been declining since then. In fact, if current marriage and divorce rate continues, only about one-third of American marriages will end in divorce, the Upshot’s Justin Wolfers has calculated.

But the rates are much higher for some groups than others, as Yau’s graphs show.

Here’s what the graph looks like for American men and women who have a high school education or less.

The graph shows the age of men and women along the horizontal axis and the percentage who have been divorced or married more than once on the vertical axis. These graphs are cumulative, so as you go from left to right they add in the people who have ever divorced or remarried at any age group, to reach the total percentage on the right hand side of the graph. As you can see, about 39 percent of men with a high school education or less divorce or remarry in their lifetimes, compared to 37 percent of women with a similar education.

And here’s what the graphic looks like for those with a bachelor’s degree. Perhaps predictably, the divorce and remarriage rates are lower, with roughly 29 percent of women and 28 percent of men with a bachelor’s degree getting divorced or remarried.

Yau also broke the divorce rates down by race. Here are the rates for whites:

The rates are slightly higher for blacks:

They are much lower Hispanics:

And lowest of all for Asians, with less than one-fifth of Asian-Americans getting divorced and remarried:

The highest rates of the bunch belong to Native Americans:

You can see more graphics, including a breakdown of divorce rates for employed and unemployed Americans, on Yau’s site, here.

Source: Who gets divorced in America, in 7 charts – The Washington Post

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