Dividing a Military Pension in a Military Divorce
There are several differences between a civilian divorce and a military divorce; one of the most notable being what happens with retirement accounts. Military pensions, like all other financial assets, are subject to community property laws. When it comes to military divorce in Monterey County, military status of either spouse can have a big effect on how property is divided. This is especially true for military pension accounts. Military service members who have at least 20 years of active duty get a lifetime pension when they retire. These pensions are considered property in a divorce. States can choose how to divvy up military retirement in a divorce and the state courts award up to half of the pension as part of a divorce.
What is a military pension and who has one?
Both active duty and reservists receive a pension plan. Active duty service members are eligible to withdraw from their pension once they retire after 20 or more years in the military. Members of the military earn interest on their pension while they are working towards retirement and this adjusts year to year based on the current cost of living. For Reservists, they have to wait until they are 60 years old to start collecting payments on their pension.
How does California divide military retirement?
California is a community property state. So, property obtained or earned during marriage is generally split 50/50 at a divorce. This includes houses and land, bank accounts, cars, and retirement accounts, including military pensions. Unlike some other states, in California, you don’t need to be married for a certain number of years to be entitled to retirement benefits. So, even if the marriage was short, these benefits come into play.
For military pensions, members pay through their military service, instead of through money contributions. They have to have at least 20 years of service before they can get the benefits. At retirement, the member gets monthly checks, and is eligible for other benefits too. The overall pension amount depends on the amount of time served, pay at retirement, and cost of living adjustments. In general, military pensions have the potential to be an extremely valuable asset with lifetime benefits.
Before a California court can divide a military pension, it has to have the authority to be able to do so. “Jurisdiction” is the legal name for the ability to make decisions. For non-military spouses, jurisdiction is pretty easy. Monterey County, California has jurisdiction if the spouse has:
- Been living in California for at least six months; and
- Been living in Monterey County for at least three months.
While military members also acquire residency after the same period of time, their domicile doesn’t automatically change due to the location of their duty station. A military member’s choice of domicile can potentially impact whether or not California has jurisdiction over the member’s pension.
What is Domicile?
A member’s domicile is his “State of Legal Residence.” It’s the place a member considers as the true, fixed, permanent home. When you join the military, your domicile is usually the state you joined in. During active duty service, members can move their domicile, depending on where they are stationed. Taxation is typically the primary consideration in changing domicile, as some states, such as Florida and Texas, have no personal state income tax. Military members often change domicile if they are stationed in one of the seven states that doesn’t tax individual wages.
Can I change my domicile?
Domicile change requires:
- Physical existence in the new state (i.e., you live there);
- Intent to stay in the new state for good (i.e., no plans to move); and
- Intent to desert the old domicile.
Showing an intent to change domicile also includes steps such as registering to vote, getting a driver’s license, and registering cars in the new state. You also have to fill out certain forms.
How does “domicile” affect military pensions at divorce?
In general, when someone files for or responds to divorce in California, that person agrees to California having jurisdiction. The jurisdiction applies to all issues, including property division. If, however, a military spouse files for divorce in California but has a different domicile, things get tricky. That spouse has to make a very important decision. That decision is whether or not to agree to have California jurisdiction over the member’s military pension.
Many military members living in California think that California is the right state to use. They never have reason to think about their choices. Or, they may not know that they have a choice at all. It is, after all, easier to have one state deal with all divorce issues, including pension. That said, different states have different laws. “Easier” doesn’t always mean better.
Some states require a marriage to be at least 10 years long before a spouse can get part of the benefits. Other states won’t separate the pension 50/50. These differences can mean very different outcomes for military members and spouses. So, everyone in a military marriage has to be careful to look into their state’s laws about pension benefits.
Do I have to let California decide the pension distribution?
If you want a different state to decide the pension, you have to object in California. The easiest way to to this is in the beginning divorce papers. The objection should be clear that the pension isn’t subject to California jurisdiction. It should also request that the Court recognize that it has no jurisdiction due to the objection.
It’s very important for the member to be constant during the divorce, and continue to object to California’s jurisdiction. That doesn’t mean that California can’t decide issues related to kids, support, or the dividing up of other property. Military pensions are their own special issue that has no effect on California’s ability to decide other issues in the divorce.
For more information about how a divorce will affect your military pension distribution, or to schedule a consultation, contact Cornwall Family Law.