If you’re a military retiree with high assets or are divorcing a military retiree with high assets in Alabama, you may be concerned about how to protect yourself in a divorce. Given the number and complexity of military benefits for retired servicemen and servicewomen, a high-asset divorce for military retirees often becomes complicated.
Alabama military retirees may encounter different rules from civilians for how retirement benefits, property, and debt are divided in a divorce. The same is true of child support and custody.
Because retirement assets are often the largest marital assets in a high-asset military divorce, they also demand careful valuation and strategic planning. Understanding federal rules as they apply to military pensions is likewise a plus.
Considering the above issues and others that may arise, if you’re entering a high-asset military divorce involving a military retiree, being informed will help you manage the process effectively to reach a fair outcome. This is what you need to know.
Understanding Military Retirement Benefits in Alabama
Military retirement benefits, which include a monthly pension, disability compensation, and healthcare, usually represent a significant part of a service member’s financial package and, therefore, play an instrumental part in Alabama military divorces involving retirees.
TRICARE provides health insurance for military families. While this coverage is not divisible in a divorce, post-divorce health insurance coverage is a hot-button issue and an integral part of financial planning for military retirees in high-asset divorces. The Survivor Benefit Plan (SBP), which provides financial support to a surviving spouse, may likewise be included in a divorce settlement. Disability compensation, though not generally divided, can affect the final financial settlement in a military divorce.
Asset Valuation and Distribution in Alabama, Including Division of Military Retirement Benefits, in Alabama
In high-asset divorces, accurately valuing and dividing military retirement benefits and other significant assets is important. This includes assessing the current value of the military pension and high-value items such as real estate, investments, and vehicles. Additionally, marital debts, such as loans and credit card bills, must be addressed and fairly divided.
Pensions for military personnel are typically based on the highest 36 months of basic pay and the total years of service. Because the years of service could coincide with marriage, the calculation can influence how benefits will be divided in a divorce.
Dividing military retirement benefits requires calling on federal and state laws. Under the Uniformed Services Former Spouses’ Protection Act (USFSPA), Alabama courts may divide military retirement pay during a divorce settlement. However, the specifics of the division will be determined by the state of Alabama.
Military pensions often require different handling from the Qualified Domestic Relations Order (QDRO) used in civilian divorces. Military retirement benefits in Alabama are divided based on the following criteria:
- The length of the marriage.
- The length of time the person served.
- The number of years the marriage and service overlapped.
Consider the following example: If a couple were married for 10 years and served in the military for 20, the non-military spouse would typically be entitled to only the share of the pension that pertained to the time the military spouse served and was married to them.
How Housing and Healthcare Play into Divorces for Military Retirees
Non-military spouses can keep their military identification card until they are officially divorced. After that, they may no longer access it.
Specifically, the non-military spouse will lose access to military housing and healthcare benefits in 30 days. However, they will have the option to purchase up to 36 months of healthcare coverage. There are exceptions for longer marriages or those with extended service.
Service members’ children may keep their health coverage until they turn 21 or 23 if they are enrolled in college. The military may also cover the cost of their return home should a non-military spouse need to relocate.
Tax Implications in Alabama High-asset Divorces for Military Retirees
While there’s no tax on dividing assets in a divorce, including retirement assets, the spouse must pay income tax on their portion of retirement assets when they begin receiving payments. Similarly, dividing high-value properties or investments in divorce can create other tax liabilities affecting spouses.
Therefore, it is imperative to consider the overall tax impact of a divorce settlement. Proper planning for these tax consequences can help avoid unexpected financial burdens. An Alabama family law attorney with experience in military divorces for retirees can help.
Preparing for a High-asset Military Divorce in Alabama for Military Retirees.
When preparing for a high-asset military divorce in Alabama with a military retiree, first, you’ll need to figure out in which jurisdiction to file. The jurisdiction could turn on where the service member was stationed or the jurisdiction where you and your spouse live now.
In addition to the documents you would have to collect in a civilian divorce, it is helpful to pull together documents such as proof of military service and financial records related to service. Doing so can help your case proceed more smoothly, especially if you need to go to court.
Other important areas to focus on in a military divorce involving a military retiree are child support and child custody if there are minor children, a special needs child, or an adult child needing continued care into adulthood. Whether you’re looking for joint or sole custody, the children’s well-being should remain a top priority.
Since Alabama’s military benefits and asset division laws can be confusing, it’s wise to consult a family law attorney who knows the ins and outs of military divorces for retirees with high assets. Having the right guidance can help you feel more secure and ready to move forward with your divorce and your life beyond it.
Additional Considerations for Alabama High-asset Divorces for Military Retirees
Military divorces for high-asset retirees in Alabama can be emotionally fraught. The stress of dividing large assets and managing military benefits can feel overwhelming. Seeking support from a legal professional experienced in military divorces for high-asset retirees and working with mental health professionals who understand what going through a military divorce entails can provide valuable assistance.
Some couples choose legal separation instead of divorce to avoid some of the complications involved in high-asset military divorces for military retirees, which raises questions about benefits during this period. Consulting with a skilled Alabama family law attorney who is experienced in military divorces for military retirees with high assets can provide valuable guidance on the implications of legal separation and how the division of military retirement benefits may impact your settlement.
Hire a family law attorney with military divorce experience if you’re a military retiree considering divorce in Alabama.
No high-asset divorce is easy or intuitive, especially high-asset divorces where a retired service member is involved. If you’re facing a high-asset military divorce with or as a military retiree and feeling overwhelmed, we’re here to support you. Our team of family law attorneys at Charlotte Christian Law is here to address your concerns, answer any questions you have, and devise a legal strategy specific to your situation.
With offices conveniently located in Birmingham and Huntsville, our skilled military divorce lawyers are here to serve you. Call us today or schedule a consultation.
