Divorce has a tendency to cause short-term financial challenges. It can be very costly to move out and establish a separate household. People also have to pay for the divorce process itself, along with splitting their property.
Spouses preparing for divorces often try to estimate what they have to rebuild with following the divorce. That process may require taking stock of financial accounts and other assets. When either spouse pursued a military career, they may have accrued military pension benefits during the marriage. Those pension benefits can be among the most valuable rewards received for military service. The service member and their spouse have strong feelings about a pension, especially if they are close to retirement age.
Is a military pension vulnerable to division in an Indiana divorce?
The marital estate may include the pension
Indiana has an equitable distribution statute. The courts tend to view anything earned or purchased during the marriage as shared or marital property. Unless the spouses had a pre-existing marital agreement designating the military pension as separate property, at least the portion accrued during the marriage is likely subject to division during the divorce.
Exactly how the spouses or the courts integrate the pension into the asset division process can be drastically different from one case to the next. There are many ways to address the pension without necessarily dividing it. The courts might order the division of the pension, or the spouses may agree to directly share the pension benefits once they become available.
In such cases, a military rule may guide the distribution of the pension. The 10/10 rule allows the Defense Finance and Accounting Service (DFAS) to make direct distributions to spouses after a divorce. If the marriage lasted 10 years or longer and the service member had at least 10 years of qualifying service during the marriage, then DFAS can make direct payments to the non-serving spouse.
Otherwise, the spouses may need to make alternate arrangements for distributing or sharing pension benefits. State law determines what assets are divisible and how the courts split them between the spouses. Military rules determine how the spouses actually distribute the pension.
Exploring the unique rules that apply to military divorces and Indiana divorces in general with a skilled legal team can help service members or their spouses prepare for an upcoming family law matter. Those who understand the basic rules can set appropriate expectations for an upcoming divorce.
