One of the main concerns for divorcing couples is if military retirement pay is mandatory. The Uniformed Services Former Spouse Protection Act (USFSPA) of 1982 does not mandate that a former military spouse be paid retirement benefits. What the act allows is for military retirement to be treated as marital property, meaning the retirement account can be divided during an simple, no-fault, uncontested divorce. Military pay is treated in the same manner as a civilian pension.
In addition, a former spouse can be named as the beneficiary of the Survivor Benefit Plan (SBP). Under this plan a retired military person can ensure that the beneficiary will continue to receive financial support in the case of the retiree's death. If the service member divorces after retirement the divorce terminates the original beneficiary in favor of the spouse. There is the possibility that coverage can still continue for the former spouse. In this case, the former spouse has up to one year after the divorce to contact the military finance center to claim former spouse coverage. Note, a military serviceperson is enrolled in the SBP plan, unless s/he specifically declines to be part of the plan.
It is in the interest of both parties to include how they want to divide marital assets in their marital settlement agreement, including how they want military retirement pay to be handled. This will provide the non-military spouse the added security of a legal document protecting his/her financial future after divorce. In addition, the steady income will help the military spouse to cover financial commitments with his/her military retirement benefits.
A former spouse may receive direct military retirement payments if the couple has been married at least ten years and there has been ten years of military service during the marriage. This is known as the 10/10 rule. If the marriage has lasted less than ten years or military service did not overlap the ten years of marriage a former spouse can be paid through the service person, but not directly through the military.
Each case is unique and a representative from Defense Finance and Accounting Service will be able to review your personal situation and give you further details.