When Love Is A Battlefield
By Carin Thomas and Stacey Michels
Summer 2006
"We have been through a lot of crap the past three years, and I'm calling it quits."
That's how one woman, calling herself the "Soon2bExAirWife" of an Air Force member who had served in Afghanistan, vented her frustrations recently on a divorcenet.com bulletin board.
Repeated deployments and relocations are hard on military family life. The threat of danger is never far from reality. And in a society where more than half of all civilian marriages end in divorce, it's understandable that a military marriage - so full of potential for excitement and fulfillment - can collapse.
Divorce, of course, is a difficult process whether you are a servicemember or a civilian. The process can prove frustrating and emotional, not to mention financially taxing.
But a military divorce presents unique financial challenges, involving laws and benefits specific to servicemembers. And while most assets still split in the case of divorce, many benefits are subject to special rules, regulations and privileges.
Get Organized
If you find yourself embroiled in a divorce, it's not too late to organize your finances and gain a sense of the financial situation for you and your spouse. Too often, one spouse solely manages the household finances and understands the family's military and civilian benefits while the other spouse is left in the dark. These tips can help get your financial house in order.
List your cash flow. Make note of all your current income sources such as military pay, the spouse's pay, rental property income, etc. Use Leave and Earnings Statements (LES) to help you determine the servicemember's gross monthly pay, including basic pay, basic allowance for housing (BAH), basic allowance for subsistence (BAS), cost-of-living allowance (COLA) and additional allowances such as jump pay, family separation allowance, hostile fire pay, hazardous duty pay and hardship duty location pay. Be sure to compile a list of your monthly bills, noting any liabilities such as outstanding loans or credit card debt.
Account for assets. Identify all shared and individual assets, including checking and savings accounts, life insurance policies, company or military retired pay, Individual Retirement Accounts, 401(k) plans, stock portfolios, real estate investments, Thrift Savings Plans and tangible assets such as cars. It is important to distinguish between shared and individual assets because certain assets, such as non-marital assets, are not divided in a divorce. Non-marital assets include property, savings accounts, inheritance and gifts. In the case of divorce, all marital assets or any asset acquired which incurs debt during the marriage are considered debts of both spouses. The specific definition of marital and non-marital assets typically is defined by the law of each state. If you have questions when accounting for assets, consult your legal advisor.
Military retired pay - Many myths surround military retired pay, so it is important to obtain correct information in order to understand what you can and cannot receive. Because military and civilian pensions are considered assets, they may be split in the case of divorce, no matter the length of the marriage. Military retired pay can be one of the most valuable assets to a military couple. You may be tempted to pass on the retired pay in lieu of acquiring the house or up-front cash. But first, do the math. The retired pay may be worth far more than the house, especially 20 or 30 years down the road.
Social Security - Don't overlook Social Security when considering financial assets in a divorce. Some servicemembers are eligible for both Social Security benefits and military retirement pay. The Social Security website offers more information on this topic (www.ssa.gov).
Survivor Benefit Plan (SBP) - This is where a portion of military retired pay goes to a surviving spouse in the event of the servicemember's death. A spouse typically loses eligibility as an SBP beneficiary upon divorce but may be able to retain coverage under certain special circumstances. The important issue is that the military member must complete the necessary paperwork after the dissolution of the marriage and elect coverage for a "former spouse." Otherwise, SBP is null and void once the divorce is finalized. Furthermore, this paperwork must be completed within one year of the divorce, even if the servicemember is not yet retired.
Medical and other military benefits - Depending on a number of factors, such as length of marriage and length of creditable service, a former spouse may be entitled to military benefits such as medical, commissary and base exchange. Under certain exceptions, the spouse would not be covered - for example, if the spouse has medical coverage benefits with his or her current employer or in the case of remarriage.
Life insurance - Courts may require the providing spouse to maintain life insurance that would cover child or alimony support payments for a specific period. An attorney can help you determine who actually owns the life insurance policy after a divorce.
Document your liabilities. Many couples, military or not, only think about dividing their assets when going through a divorce. Just as important, you should consider your personal and joint liabilities such as outstanding loans and credit card debt. Both spouses typically are responsible for outstanding liabilities, which can affect how the assets are divided.
Examine your credit history. Scrutinize your credit report to ensure that your ex-spouse's debt, if any, doesn't show up. If you see any errors, call the credit reporting agencies to have the errors corrected. Knowing your credit history may help you in the future in the event of questions concerning an ex-spouse's business liabilities and existing debts. If you find yourself on your own, a good credit history will boost your ability to borrow money.
Determine jurisdiction for filing divorce. Determining where to file for divorce is a question that often plagues military families. For example, your spouse is stationed in California but on an unaccompanied tour in the Middle East. You decide to move to Colorado to be closer to your family. Since you may have more than one jurisdiction available to you when for filing divorce, you should consult your legal advisor to determine which state has the most advantageous divorce laws.
What about the children? Each military branch maintains its own policies regarding family support and the obligations of servicemembers. In addition, state domestic relations or family law will impact child custody and support issues. Due to these complexities, it is important to find legal counsel that understands the interaction of state law with military law.
Execute A Financial Strategy
Your civilian financial advisor or military financial counselor can help you develop a strategy that accounts for your long- and short-term financial goals, your age, risk tolerance and other concerns. Your strategy also should consider issues such as career development, retirement, estate planning, paying for a child's college tuition, insurance, banking and credit issues. Be sure to ask the civilian or military advisor if he or she has experience with military divorce cases.
When financial matters are in disarray, it's easy to overlook the details. Make certain your assets are properly titled in your name and not with your ex-spouse. Also, review important documents such as your will, insurance policies, retirement plans and other assets to make sure your beneficiaries reflect your current wishes.
Every divorce deserves special attention and should include consideration of the unique facts and circumstances that are part of the military lifestyle. Consult with a qualified team of advisors, such as your military or civilian financial advisor and legal assistance office. They are professionals who can help you survive this difficult transition in your life.
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Carin Thomas and Stacey Michels are financial advisors and divorce specialists with Merrill Lynch in Bloomington, Minn. Carin is an assistant vice president at that office; Stacey is president of the 934th Airlift Wing Officers' Spouse Club and an ombudsman for a U.S. Naval Reserve unit. Call 952-820-1983 or e-mail carin_thomas@ml.com or stacey_d_michels@ml.com.
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Outreach Programs Aim To Limit Divorces
The services have introduced new programs and pumped up existing ones to help families strengthen their relationships. The Army's offerings include:
Deployment Cycle Support Program: includes briefings for soldiers on how their absence and return may affect their family relationships
Building Strong and Ready Families: two-day program helps couples develop better communication skills, reinforced by a weekend retreat
Strong Bonds: marriage education program focuses specifically on issues that affect Guard and Reserve couples
P.I.C.K. a Partner: program helps single soldiers make wise decisions when they choose mates
The Marine Corps' Prevention and Relationship Enhancement Program is a two-day workshop that teaches couples how to manage conflict, solve problems and communicate effectively. The Navy has a similar program in its Marriage Enrichment Retreat, a weekend getaway for couples.
--Carl Surran
Related articles:
Financial Advice for Couples: Kiss And Make Up... And Grow Your Cash
Military Marriages Can - And Do - Work
Finding a Good Lawyer: Advice for Military Servicemembers and Families
Sharing, Understanding Financial Values Can Reduce Deployment Stress