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MILITARY DIVORCE – DISABILITY
THE WIFE TRAP – LOSS OF BENEFITS

Former Spouses of service members are at an increased risk of losing pension benefits awarded in divorce because of post-divorce action by the service member. This potential for a significant reduction of the ex-Wife's pension benefit is the result of a 2017 U.S. Supreme Court decision.

The affected Former Spouses are those whose Husband's retire (after the divorce) and then claim a disability rating of up to 49%. As a result of this post-divorce action, an ex-Wife can lose her pension award whether her former Husband is Reserve Component or Regular Component Member.

The trap is set when your Marital Settlement Agreement awards you "50% of the Marital Portion of his Military Pension" BUT your attorney has not anticipated this post-divorce ability of the service member to later elect "partial disability retirement". Because of attorney oversight, the Service Member upon retirement can "waive" a portion of his pension. RESULT: He will automatically reduce the amount of pension benefits payable to his Former Spouse (but his loss is offset by the new V.A. Disability Pension). Be clear: A Former Spouse is prohibited by Federal Law, from sharing any portion of this Disability Pension.

For Example:
At divorce, Wife is awarded 50% of marital part of military pension. This award is then made part of the parties Marital Settlement Agreement and then a QDRO.

THE UNFORSEEN TRAP.
Years later, the Service Member to greatly reduce his ex-Wife's share of his pension, elects 49% disability. This causes a 49% reduction of his pension (Now there is LESS to share with his ex-Wife)! He is then able offset this pension reduction by collecting a V.A. disability pension benefit equal to his "waived" 49%. The Service Member loses nothing: but his Former Spouse now has a Greatly Reduced pension.

This post-divorce action by the service member can reduce his ex-Wife's pension benefit by as much as 51%. To avoid this post-divorce action by the service member, contact TROYAN for procedures to consider at the time of divorce to avoid this damaging action by the service member.