The Supreme Court ruling in Howell vs. Howell last month could affect the way disabled military retirees split their pensions with ex-spouses. The ruling may allow disabled retirees to pay less to their exes.
In military divorces, the spouses of service members are often entitled to receive a portion of the service member’s retirement benefits. However, some disabled veterans are able to exchange part of their retirement pension money for disability benefits. Since disability benefits are not classified as marital assets, some veterans were being required to pay additional money to their ex-spouses to make up the difference. However, in the middle of May, the Supreme Court ruled in Howell vs. Howell that state courts cannot force veterans to pay extra money to their exes.
The Howells finalized their divorce in 1991. The divorce court classified the ex-husband’s military pension as a marital asset and split it 50/50 with his former wife. In 2005, however, he secured a 20 percent disability rating, awarded by Veterans Affairs. He then waived approximately $250 of his monthly retirement benefits to receive the full disability benefits award from the VA. This caused his ex-wife to experience a reduction in her monthly pension payments by approximately $125.
Veterans who exchange a portion of their military retirement benefits for disability benefits save money on taxes because disability benefits are exempt from income tax, while pension payments are subject to taxes. Furthermore, because disability benefits are not a part of the marital estate, divorced veterans save money by sharing less of their income with their ex-spouses.
If you’re curious how the Howell vs. Howell ruling may affect your military pension and military disability benefits, a Florida military divorce lawyer can help. Your lawyer will review your current divorce orders to determine your legal rights and options regarding any military benefits questions you have.
Source: military.com, “Supreme Court Ruling May Cut Spouses’ Divorce Pension Payments,” Amy Bushatz, accessed June 16, 2017