For the tens of thousands of military members and their families who live in California, government benefits often help them remain financially secure. Those benefits and the programs under which they’re provided can also raise unique issues when a military member and his or her spouse decide to divorce. California’s Third District Court of Appeals recently considered some of these issues.
Husband and Wife divorced in 2003, following 29 years of marriage. They entered into a marital settlement agreement at the time of the divorce, which laid out how they split community assets and other property. Husband served in the U.S. Navy for 17 years during the marriage and began receiving military retirement benefits in 1991. The spouses stipulated in the agreement that Wife’s share of Husband’s military retirement benefits was about $475 per month. Wife waived her right to a piece of Husband’s Social Security and disability benefits, as well as “any and all work related benefits,” under the terms of the agreement.
Husband was diagnosed with post-traumatic stress disorder related to his tours of duty in the military. After the spouses divorced, the Department of Veterans Affairs offered him special combat-related compensation in lieu of his retirement benefits. Although the amount was the same as his retirement benefits, the combat-related compensation wasn’t subject to taxes. Husband accepted the change in benefits and stopped paying half to Wife. A trial court eventually sided with Wife, however, ruling that she was entitled to continue receiving $475 per month. The court said the agreement was intended to ensure that Wife kept getting her original share of the benefits, even if Husband opted not to receive them.