Uniformed Services Former Spouse’ Protection Act (USFSPA)
Under the USFSPA, state courts are given the authority to treat military retirement benefits as property subject to division in a divorce proceeding. The USFSPA permits a former spouse to receive up to 50% of the military member’s retired pay directly from the Department of Finance and Account Service center based on the number of years married, concurrent with military service. The computation of retired pay is made based on the rank at the time of retirement not the time of divorce.
Military Qualifying Court Orders (MQCOs)
Dividing Military Retirement benefits is arguably the most complex to accomplish. Although different names are used, typically an order used to divide a military plan is referred to as a Military Qualifying Court Order. For a proposed MQCO to be approved, the language must be crystal clear to the military plan administrator: the Defense Finance and Accounting Servicing (DFAS). The MQCO must also take into consideration and comply with provisions of the Soldier’s and Sailor’s Civil Relief Act of 1940. Otherwise, be prepared to amend and to amend yet again until the DFAS is satisfied.
There are limitations and strict timing requirements that could lead devastating consequences if overlooked. For example, DFAS can only make payments directly to the former spouse if the 10/10/10 rule is satisfied. This rule requires 10 years of military service creditable towards retirement, at least 10 years of marriage, and at least 10 years of marriage and 10 years of creditable service that overlap one another. This does not mean that the former spouse is precluded from receiving his or her share of the benefits; it just means that the former spouse will have to look to his or her ex-spouse directly for payment.