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Military retirement and disability pay affects property division

Financial concerns are often one of the most worrisome parts of the divorce process for many Texas couples. Now, rather than planning for one household, many times the same amount of money must provide for two separate households. This by no means indicates that it cannot be done; however, as a part of the planning and property division process, finances and potential changes to these finances need to be taken into consideration.

Many Texas individuals depend upon military retirement pay as a portion of their monthly income. When one of these couples divorces, it is possible that the spouse will receive a percentage of this income. However, if the veteran later becomes eligible for military disability pay, there could be a negative impact on the amount that the spouse receives.

While disability pay must be reported as household income when applying for income-based assistance, such as a student loan, it is not considered to be a marital asset. Thus, if the military retirement pay is reduced because the veteran now receives disability pay, the actual amount that the spouse receives is reduced. Even though the percentage stays the same, the amount the percentage is based upon is lower.

In an effort to correct this situation, some courts had been requiring the veteran to make up the difference in another form of payment. However, the U.S. Supreme Court has now ruled that this practice is not proper. According to the court, this is a situation that should be addressed as part of the property division negotiations in the divorce process. If an individual in Texas is concerned about how this ruling may affect a potential or already existing divorce agreement, he or she will want to discuss the matter with an experienced attorney.

Source: military.com, "Supreme Court Ruling May Cut Spouses' Divorce Pension Payments", Amy Bushatz, May 18, 2017

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