Think military divorce means automatically splitting everythign 50/50 and going to court? Wrong on both counts! Certified Divorce Financial Anaylst David Smith reveals what most military families get wrong and what it costs them!

In today's episode, we'll discuss the complex financial and logistical aspects of military divorce, covering everything from pension division to healthcare benefits, tax implications, and emotional support strategies.

Key Topics

Jurisdiction & Legal Considerations

• Multiple state options for filing (voting state, property ownership state, driver's license state, tax filing state)
• Importance of consulting with an attorney early to determine proper jurisdiction
• Each state has different rules, formulas, and processes
• JAG office can provide consultation but cannot represent service members in divorce proceedings

Types of Divorce Processes

• Four main options: DIY without professionals, mediation, collaborative divorce, litigation
• Court is NOT the only option
• Out-of-court processes (mediation, collaborative) are often more cost-effective, private, and less stressful
• Consulting attorneys vs. representing attorneys - different roles and costs

Military Pension Division

• Division is not the only option - can use offsetting with other assets
• Must determine what portion is "marital" vs. "separate" property
• Not all pension components are divisible (e.g., VA disability)
• Requires a Military Retirement Pay Division Order through DFAS
• Differences between active duty, reservist, and guard member pensions

Survivor Benefit Plan (SBP)

• Critical considerations:
  • Only ONE SBP beneficiary can be named
  • Previous spouses from earlier marriages may already occupy the "SBP chair"
  • Premium costs must be negotiated
  • Former spouse can be SBP beneficiary even without receiving pension payments
  • Time-sensitive: Required forms must be submitted within specific timeframe or rights are lost
  • Cannot be automatically transferred - requires proper paperwork

TRICARE Benefits

• Courts CANNOT order TRICARE coverage - falls under federal rules
• Key rules: 20-20-20 (full benefits for life), 20-20-15 (transitional benefits)
• Based on: length of marriage, service member's creditable years, overlap period
• COBRA-like option available if don't meet other rules

GI Bill Transfer

• Must be transferred WHILE married - cannot go to former spouse after divorce
• Service member can rescind the transfer
• Can be transferred to children as alternative
• Settlement agreement language is critical to protect this benefit

Thrift Savings Plan (TSP)

• Multiple TSPs possible (civilian federal employee spouse, reservist who went active duty)
• Pre-tax and Roth portions have different tax consequences
• Must account for outstanding loans
• Requires Retirement Benefits Court Order (different from pension division order)
• Not always split - can use offset method with other assets

Other Unique Military Assets to Consider

• Military leave - has monetary value on LES
• Credit card points and miles - can be worth $30,000-$40,000
• USAA Subscriber Savings Account
• Pets - especially valuable show animals
• Life insurance policies

Tax Implications

• Filing status changes
• Tax bracket shifts
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