US Flag

Divorce ... Military Style


Order in the court! Thirty years after its inception, the Uniformed Services Former Spouses Protection Act needs to have its glaring inequities corrected, one of the most obvious being the treatment of military retired pay as jointly earned marital property that can be divided in advance.


Staff Sergeant James J. LoCorto served with the Marine Corps during Desert Storm. Upon returning to his duty station at Twentynine Palms, California, with plans to retire after 20 years of honorable military service, he found his wife of 19 years cohabitating with another man. In May 1991, she abandoned LoCorto and their three children and filed for a no-fault divorce in California. The divorce became final in January 1992, and she received half the property of the marriage plus 47.5% per month of LoCorto's military retirement pay. Payments will continue until his death or hers, even if she remarries.


LoCorto and tens of thousands of other military veterans over the past two decades have been blindsided by a law their military leadership neglected to tell them about. The Uniformed Services Former Spouses Protection Act (USFSPA) was enacted by the 97th Congress in September 1982, with an effective date of 25 June 1981, ostensibly to protect divorcing spouses of military personnel but it more often strips affected military personnel and their families of their constitutional right to equal protection under the law.


Prior to the USFSPA, the states had no federal authority to tamper with any part of the military compensation system. The USFSPA now cedes to the states the federal government’s responsibility for determining the amount of pay retired military personnel should receive for fulfilling their indefinite obligation to the federal government. Conversely, the USFSPA inserts the federal government into a legal process -- divorce -- historically reserved to the states.


BACKGROUND


On 26 June 1981, the U.S. Supreme Court ruled, in McCarty v. McCarty, that "the military retirement system confers no entitlement to retired pay upon retired member's spouses and does not embody even a limited community property concept." The court further opined that, "the application of community property principles to military retired pay threatens grave harm to clear and substantial Federal interests." The McCarty court recognized, however, that the situation of a former spouse of a retired military member could sometimes be a serious one, possibly resulting in destitution or some other unfair predicament, and invited Congress to legislatively review the situation. The 97th Congress responded to this carte blanche invitation by imbedding the USFSPA provisions, as a rider, in the Defense Authorization Act of fiscal year 1983.


The USFSPA circumvented -- but did not supersede -- the McCarty ruling by providing that "a [state] court may treat disposable retired pay payable to a [military] member for pay periods beginning after June 25, 1981, either as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction of such court."  In most jurisdictions, where this authority did not exist, in 1981, it does now, in 2010.


The most common misconception of military retired pay is that it is a pension and, therefore, property that can be divided. However, federal statutes, case law have historically and regulations that govern the lives of subject service personnel, consistently regarded military retired pay as reduced compensation for reduced services, with no attributes of a pension. The Comptroller General, the Department of Defense, the Internal Revenue Service, and U.S. Bankruptcy courts have also taken this position. The USFSPA raises a serious and, possibly, litigious anomaly, in that subject military personnel and their former spouses are required to pay federal and state income taxes on pay legally reclassified by the USFSPA, as jointly earned marital property.


Although it was not the intent of the 97th Congress that the USFSPA be applied retroactively, thousands of divorces finalized prior to 25 June 1981 were reopened for the USFSPA gold. This imposed severe hardships on the affected military personnel and their families who were suddenly faced with commencing unexpected USFSPA payments as well substantial arrearages. Congressional intent vis-à-vis retroactive applications was not codified into law until November 1990. Even then, the amendment applied only to divorces prior to McCarty and required the continuation of payments for two more years: until 5 November 1992. This requirement was unreasonable and discriminatory because it provided no relief for military members divorced between McCarty (26 June 1981) and the effective date of the USFSPA, and because military retirees were given no comparable adjustment period when the USFSPA was originally enacted.


In addition, the USFSPA had no grandfather clause; this deficiency changed the military retirement compensation system retroactively. Military members already retired, or eligible for retirement, were caught off guard by a law that they had no reason to anticipate. This failure to grandfather denied equal protection to affected divorced military veterans, whose lives were devastated without prior notice and without compensatory relief. The USFSPA does, in fact, constitute an "unjust taking" in violation of rights guaranteed by the Fifth Amendment to the U.S. Constitution.


The most invidious aspect of the USFSPA is the reclassification of pay as jointly earned marital property that permits payments to the benefiting former spouse for life -- whether or not they remarry. This is inconsistent -- both with the traditional treatment of alimony in the application of domestic relations law and with:

  • The U.S. Foreign Service and Central Intelligence Agency former spouse protection acts
  • DoD's Survivor Benefit Program (SBP)
  • DoD's widows' pension benefit program
  • That section of the USFSPA provisions that authorize government payments to abused military spouses and dependent children.

All four of these programs provide termination payments upon remarriage of the beneficiary. The USFSPA abused military spouse/dependents payments provisions are discriminatory because they stop when an abused former spouse remarries, but payments to unabused formerspouses, specified elsewhere in the USFSPA, do not.
The law contains yet another inconsistency The military veteran making USFSPA payments is subject to involuntary recall to active duty, continuing compliance with the Uniform Code of Military Justice and constraints on employment, travel, etc. Yet, the former spouses, drawing a court ordered share from the same retirement pay is in no way obligated to the government.


The USFSPA's implementation in the states has been contradictory, confusing and often contrary to the stated intent of Congress, the U.S. Supreme Court, and the USFSPA itself. The USFSPA's stipulation that a court "may treat the disposable retired pay ... " has emerged, in practice, as shall. Moreover, courts frequently make contemporaneous awards of military retired pay, alimony, child support, and other assets of marriage. In addition, a former spouse is eligible for social security benefits deriving from the military member's entitlement. Part of the pre-USFSPA lore was that some needy military spouses always have had the same full range of remedies in divorce court as their non-military peers. In addition, military spouses have long enjoyed the power of garnishment of a military member's pay. Congress could have resolved the dilemma of the U.S. Supreme Court's "McCarty fence" around military retired pay simply by enacting legislation that would have rendered it a source of alimony in a divorce proceeding, but as pay, not property. Most members of Congress probably were oblivious to the "payments until death" implications of reclassifying pay as property. There are hidden time bombs in the USFSPA:

  • The USFSPA permits an former spouse to receive "windfall benefits," meaning that retirement payments may be based on the rate of pay extant at the time of retirement of the military member, not at the time of divorce. This happens frequently when divorce occurs during active duty and USFSPA payments do not commence until retirement. As a result, the former spouse receives benefits based on in-service advancements for which they cannot conceivably claim any credit.

  • The USFSPA does not stipulate any limit on the time permitted for an former spouse to enter a claim for payments. Consequently, the divorced military member can be doomed to a life in retirement waiting for "the other show to drop."

  • The USFSPA provides that disability pay being received under Chapter 61 of USC 10 1201 et seq. is not to be included in the calculation of "disposable pay." This decision was reinforced in 1989 by the U.S. Supreme Court's ruling in Mansel v. Mansel. Despite this, divorce courts frequently include disability pay in the calculation of disposable pay under the USFSPA. Since USFSPA casualties usually do not have the financial resources required to appeal these unjust decisions, further legislative relief is required to ensure equal protection under the law.

Although the USFSPA manifestly applies only to military retired pay, decisions of divorce courts since 1981 clearly indicate the need for further protection of active-duty military personnel to prevent:

  • Defacto, court-ordered retirements in order to commence USFSPA payments.

  • Distributions of active-duty pay pursuant to court orders under the USFSPA.

  • Continuation of USFSPA payments after involuntary recall of retired military members to active duty.

Despite the fact that many military members already have been impacted by the USFSPA, DoD does not brief its personnel on the law.  No unit commander will deny that unless all personnel in their charge are properly trained and equipped they are easy prey in a military divorce friendly fire action.


Finally, although the USFSPA's congressional sponsors claimed this law applies equally to both male and female military members, the only pronoun in the law itself is "his." This may partially explain why the prestigious Defense Advisory Council on Women in the Service (DACOWITS) steadfastly maintained that the USFSPA is of no consequence to women in the service and is, therefore, not on the DACOWITS agenda but it is.


RESTORING FAIRNESS TO THE MILITARY DIVORCE PROCESS
Most people would agree that both members of a military marriage that ends in divorce should expect equal justice in the courts. Even in this era of no-fault divorces, there is no legal prohibition against basing divorce settlements on merit, need, and ability to pay. Unfortunately, a review of court experience with the USFSPA since 1981 shows that USFSPA in theory is an option, but in practice it is a mandate.  Any sane divorce court judge who rules against USFSPA provisions, in a military divorce action, knows their decision will be appealed before sunset the same day!


An overwhelming majority of the national community of military veterans support organizations, with an aggregate membership of more than 10,000,000, supports reform of the USFSPA to resolve its numerous inequities. Some (e.g., the American Legion) have advocated its repeal. After thirty years, the egregious impact of the USFSPA is in plain view. Moreover, the status of the early 1980s military spouse has undergone revolutionary social, economic, and cultural changes, that have moderated the climate in which the USFSPA was conceived.
Considering the recorded reluctance of Congress to repeal any legislation, once enacted, repeal of USFSPA is unlikely. Moreover, repeal would again raise all the questions that followed the McCarty decision regarding treatment of military retirement pay in divorce proceedings. Most fair-minded people agree that in certain circumstances some equitable division of military retirement pay can and should be made. One extreme case would be if retirement pay was the only existing asset of a military marriage ending in divorce. Therefore, reform of the USFSPA to resolve its manifested inequities is a more reasonably attainable goal.


The leading proponent of reform is the American Retirees Association (ARA), a California-based nonprofit organization of male and female active duty, reserve and retired uniformed service personnel. The ARA was formed in 1984 for the exclusive purpose of resolving the inequities in the USFSPA. They pursue this objective closely with the other military veterans' support organizations whose broader agendas include USFSPA reform or repeal. These groups agree that the following would go far toward restoring equal justice to the military divorce process:

  • Terminate USFSPA payments to former spouse beneficiaries, upon their remarriage, and end payments to currently remarried former spouses not more than 180 days from the date of enactment of this amendment. This provision could be softened by providing that it would not apply to former spouses who had remarried but were subsequently widowed or divorce and are currently unmarried.

  • Restrict USFSPA awards to correspond with the military retiree's length of service and pay grade at the time of divorce, not the future time of retirement. USFSPA payments would, however, be adjusted to existing pay scales at the time of retirement.

  • Establish a statute of limitations giving former spouses two years from the date of a final divorce to seek a division of military retirement pay under the USFSPA.

  • Reinforce the USFSPA provision that precludes the inclusion of disability compensation in the calculation of disposable pay, by denying the Defense Finance and Accounting Service (DFAS) authority to enforce such orders.

  • Provide specific wording to protect military personnel performing creditable service, by precluding: involuntary, court-ordered retirements in order to commence USFSPA payments; distribution of active-duty pay pursuant to court orders under the USFSPA; and USFSPA payments after recall of retired military members to active duty.

  • Preclude retroactive application of the USFSPA for any divorce finalized prior to 1 February 1983. Public Law 101-510 of 5 November 1990 prohibits retroactive opening of divorces finalized on and before 25 June 1981 -- one day before the U.S. Supreme Court's McCarty decision. This denies relief for those divorced during the gap between McCarty and the effective date of the USFSPA. The failure to grandfather the USFSPA is a manifest injustice to military personnel who had served honorably prior to 1 February 1983 and were peremptorily deprived of their matured right to full retirement pay.

  • Require the leadership of the uniformed services to brief personnel in their charge, regarding the existence of the USFSPA and significant threat to their welfare, contained in its provisions.  Failure to do so is linked to tragic suicides and letters of condolence to shocked parents.

BOTTOM LINE


Honorable military veterans have never subscribed to the theory of the "throwaway wife" vociferously espoused by USFSPA advocates during the time that it was being considered by the 97th Congress. Neither do they conform to the stereotypical military member then represented as quintessential, devil-may-care, madcap playboy who roams the earth seeking adulterous relationships while leaving at home a faithful wife and children who can be abandoned at will. This law, as it stands, in 2010 is manifestly unfair. Somehow, military veterans must convince their "new millennium" contemporaries to seek an equal justice “tie” in the divorce court.