Tax Confusion

When Americans think about taxes, confusion and frustration are usually two common emotions associated with the word. Where are my taxes going, and who are all the individuals that are benefiting from my hard earned money? But what if I told you that military retirement funds are now paying for the benefits of veterans and divorce?

According to an article entitled “Military Retirement Pay Veterans Benefits and Divorce Make for Tax Confusion,” a man by the name of Elmer Nuss, was divorced in the year of 1998. However, the court ordered that one half of his military retirement funds be paid to his ex-wife. According to federal law, a state court judge can order a split in military retirement funds be paid to the ex-spouse, as long as it is consistent with state Family Law principles. On the other hand, if a spouse is receiving disability benefits, it cannot be distributed to a former spouse. However, disability funds can be taken and use for spousal or child support debts.

The law can allow for a veteran to receive VA benefits, but that in turn reduces the amount of retirement pay the individual is currently receiving. This can cause issues for a spouse that is in need of a military divorce. One way to prevent this from occurring is fully educating yourself and entering into a property agreement that fully addresses what occurs when a veteran’s retirement benefits are reduced.

The way military retirement is divided to pay veteran’s benefits varies from case to case. Specifically regarding Elmer Nuss’ case, he did have to pay to his ex-spouse, but this is not true for every case.

If you are concerned about what will happen to your retirement fund after you divorce, or want more information about which retirement plans require what course of action, talk to an experienced Family Law attorney. Schedule an appointment with a law firm knowledgeable in divorce, money and property. Get a clear understanding of the law that may affect you if you are thinking about getting divorce.

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