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Military divorce can have significant impact on pay; retirement

The prospect of going through a divorce is seldom a welcome one. If the dissolution is between a service member and a civilian spouse, it is important to know how a military divorce can impact one's pay and future retirement pension. Colorado residents who are preparing for this type of divorce may be unaware that many of the decisions regarding property division will be determined by state laws.

Divorce is a complicated process, and a military divorce may be even more so since there are different regulations and benefits involved. One of the differences is how the federal Uniformed Services Former Spouses' Protection Act (USFSPA) works to protect spouses. This law was passed in 1982 and granted state courts the right to allow former spouses access to military retirement pay. This act does not guarantee a former spouse a certain percentage of pay or retirement but refers to the right of a former spouse to receive payments directly through the Department of Defense. 

The USFSPA allows retirement benefits to be viewed as property, and as such it can be considered a divisible asset. The act specifies that a former spouse may be entitled to receive payments directly from the Defense Finance and Accounting Services under court orders. Any amount that a former spouse may receive from a divorce settlement is negotiable. Furthermore, it is conceivable that a court could award a former spouse 100 percent of a servicemember's retirement, though the USFSPA would provide a maximum of 50 percent, making the servicemember responsible for the remaining amount.

There is also confusion over the so-called 10/10 rule regarding eligibility for a former spouse to receive retirement benefits. This rule only refers to whether the spouse would receive payments directly. State courts determine whether pay or retirement will be divided. Colorado residents who are preparing for a military divorce will be best served by consulting with an attorney who routinely handles these types of proceedings.

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