All states permit the division of a servicemember’s military retired pay in divorce. Not all states handled the division the same way, however. Some states assume that the entire benefit is divided between the former spouses, some separate out the portion earned by the servicemember prior to marriage (often through a calculation known as a “coverture fraction”), and so on.
The federal government does not usually get involved in divorce laws, leaving those mostly to individual states. However, the federal government did provide some guidance regarding one aspect of dividing military retired pay.
The “frozen benefit rule” applies to servicemembers getting divorced while still serving (active duty or reserve). This rule was implemented in 2016, and must be followed by all state divorce courts. The Frozen Benefit Rule was designed to address the question of whether the former spouse should share increases in military retired pay due to post-divorce adjustments in rank and length of service. The Rule prevents the former spouse from sharing in such increases, even if the couple agrees to do so in their divorce judgment.
The Defense Financing and Accounting Service (DFAS) was concerned that most orders to divide military retired pay were improperly drafted, leading to many disputes when calculating post-divorce increases in benefits. DFAS also was unable to process the orders, and thus was rejecting many and requiring redrafts. The Frozen Benefit Rule applies a one-size-fits-all approach to streamline the process.
While the Frozen Benefit Rule does reduce disputes, it also removes some flexibility from divorcing couples by limiting options in settlement discussions. The Rule also takes the position that post-divorce increases in rank and pay are not related to the former spouse’s contributions.
Prior to this Rule, some state courts took the position that the servicemember’s increased post-divorce rank and pay could only have occurred because of the previous efforts during the marriage. Therefore, the former spouse should share in the servicemember’s later increase. Divorce courts in these states no longer have this option.
Divorcing spouses and servicemembers must be aware of all benefits, and the very strict rules governing them, to manage expectations. The Frozen Benefit Rule is only one of these options. Your divorce lawyer must be able to discuss these with you.
Attorney David Kowalski routinely handles military divorces for both servicemembers and their spouses. Contact him at 608-709-5000 with any questions.