Military Pension Apportionment and Divorce

The end of a marriage is obviously a life-altering experience. Divorce can also turn into a complex legal matter. In the past several years, U.S. Congressional appropriations bills have led to legislative reform of U.S. federal Air Force, Army, Navy or Military Reserve pension fund distribution rules pertaining to spouses undergoing divorce. Ex-spousal rights to Department of Defense (DoD) employee pension funds not considered to be joint tenancy accounts, are subject to specific rules. The result of policy reform permits military retirement contribution funds to effectively reduce distribution to former spouses. Exception to federal enforcement of rules regarding military pension funds, are concurrent state legislative provisions guiding intestate succession of estate assets to ex-spouses, including military pension funds, at time of the decedent’s death.

Spousal Entitlement Rules

Laws applying to military pension apportionment and divorce effectively entitle spouses distributions accorded by federal and state rules of estate. Military rank and duration of enlistment are part of the consideration related to length of marriage. Proportional rights to a military personnel’s retirement contribution plan or other pension fund savings where participating active and retiring service members, and their former spouses are concerned., is determined according to existing DoD policy guidelines.

Example is the contiguous marriage of a spouse with an Army sergeant first class (E-7) for thirty years of service. The proportional calculation of fund distribution would be a fixed benefit up to 50 percent of 20/30 or two-thirds at time of retirement. No cost-of-living adjustments is accorded ex-spouses under DoD retirement fund rules. The DoD’s “fixed benefit” division is guided by federal legislative rules related to public administration.

Rights of Revocation

Example is New York Law EPTL 5-1.4 rules of revocation, which do not automatically negate nomination of an ex-spouse as trust agent, executor, fiduciary, guardian, representative, trustee, or attorney-in-fact at time of a decedent’s death. Under the state’s divorce and annulment revocation rule, dissolution of a marriage does not automatically revoke an ex-spouse’s power of attorney. The same with revocable dispositions (“testamentary substitutes”) such as joint tenancies (i.e. joint banking accounts) or any existing lifetime revocable trusts, or insurance policies (IN RE: The Estate of Joseph SUGG, Deceased. No. 2013–5055/B, Decided: June 29, 2015).

Estate Laws and Spousal Rights

Both federal and state rules of estate are relevant for understanding spousal rights during a divorce. While federal DoD oversight of military pension fund account administration is subject to specific rules regarding ex-spouses, those account often list the name of the party in question as a joint tenant. Joint tenant accounts held by trusts are subject to the estate laws of the state jurisdiction where they were formed. Moreover, ex-spouses may still be listed as beneficiaries or even designated executor status with continued rights to trustee administration of an estate. This is especially the case when children from the union are inheritors.

Federal Department of Defense guidelines for military pension transfers and ex-spousal apportionment at the time of a decedent’s death are preempted by state rules of intestacy.

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