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Property Issues in Divorce Involving Military Personnel

In my article, YOU STAND FOR US; WE STAND FOR YOU, it was noted that military personnel are not immune from the tragedy of divorce; and like civilian divorces, the same property issues arise, but with some different rules. What I am focusing on in this article is RETIREMENT and post divorce entitlements for the non military spouse (“Former Spouse”).

For sake of brevity, I’ll refer to the Servicemember as a soldier.

A soldier is entitled to a pension (a Defined Benefits Plan) based on the number of years of satisfactory military service, generally the completion of 20 years. Until 1983, federal law was silent on the power of the State courts to divide military pensions. However, in the 1981 McCarthy case, the U.S. Supreme Court held that the Supremacy Clause of the Constitution prohibited the division of military retired pay as a community property asset. In dictum, the Court indicated that Congress could change that by appropriate legislation. Taking the hint, Congress enacted the Uniform Services Former Spouses’ Protection Act of 1983 (“USFSPA”). That Act gave divorced spouses the right to share in the military retired pay in proportion to the number of years of the marriage during the soldier’s years of satisfactory military service.

The soldier is generally required to serve a minimum of 20 years, and the retirement age is not as critical as the total number of years served. The retirement benefit at 20 years is 50% of the Base Pay at the date of retirement with the maximum benefit being 67% at 30 or more years of service.

In Texas, the Former Spouse would be entitled to 50% of the military retired pay based on the number of years of marriage during military service. This also is applicable to the weekend warrior, the Reservist. Unlike the active duty career soldier, whose military PENSION is based a minimum of 20 years, the reservist is based on the total number of points that will equate to twenty years. However, the Former Spouse’s share is still calculated the same way.

There are some unique quirks or Rules to this military pension system that is critical to property division considerations. The first Rule is the 10 year rule. Under USFSPA, the Defense Finance and Accounting Service (“DFAS”) is not required to garnish the retired military personnel’s retired pay for the benefit of the Former Spouse unless the marriage was ten years or longer as of the date of the divorce and overlapped 10 years of military service. In that case, a State Decree of Divorce ordering that the Former Spouse’s share of the military retirement be withheld from the military retiree’s retirement pay would not be honored.

The second Rule is that a Former Spouse may also be entitled to 55% of retiree’s monthly retirement pay as a lifetime annuity upon the death of the retiree. This annuity is known as the Survivor Benefit Plan (“SBP”) and is clearly a valuable entitlement for a Former Spouse. However, the retiree must make the selection to pay for the SBP and designate Former spouse as the beneficiary at the time of his retirement. Some don’t because the SBP payment is taken out of the retirement pay. The Former Spouse may lose this right if she remarries before her 55th birthday; yet, if she divorces later, she may be reinstated. Go figure.

The third significant Rule is the 20/20/20 Rule. As of the date of the divorce, a marriage of 20 years; a military service of at least 20 years and the 20 years of marriage overlapped those 20 years of military service by the soldier. If the Former Spouse meets this Rule, the Former Spouse may be entitled to lifetime TRICARE (health care) and commissary and exchange benefits, as well as the appropriate portion of the retiree’s retirement pay and the SBP. This is a valuable right that can be a part of the negotiations, especially in light of the relatively young age of military retirees compared to civilian retirees.

But what is the Rule if the there’s not 20 years of overlapping marriage? The 20/20/15 Rule comes into play. 20 years of service and 20 years of marriage with more than 15 but less than 20 years of overlapping marriage. The SBP and the proportionate share of the retirement pay is still available, but not commissary and exchange privileges. TRICARE is only for one year after the divorce is final. There is, however, a post TRICARE health insurance plan that can be purchased by the Former Spouse that very similar to TRICARE. Like COBRA in the civilian world, it has a short life span and in this case only 18 months. However, relatively speaking, it is much cheaper than COBRA. Thus, the retiree gets TRICARE for Life; the Former Spouse gets TRICARE for one Year (possible 36 months).

The 10 year Rule, the 20/20/15 Rule and the 20/20/20: all have significant impact on the division of military retirement issues. Also, the SBP is a part of the property settlement picture. Obviously, when dealing with a divorce involving military personnel, these issues must be explored as soon as possible in the process.

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Relocation Geographic Restrictions

By Texas Family Law Attorney, Doug Wright

There is a presumption in our State law that in a custody order the court will require that the child/children’s residence be restricted to a geographic area. The courts typically restrict the area to the county where the order is entered and it’s contiguous counties. If one of the parties later seeks to have the residence restriction lifted the case law suggest that there are certain factors that the court should consider.

  1. The distance involved;
  2. The quality of the relationship between the non-custodial parent and the child;
  3. The nature and quantity of the child’s contact with the non-custodial parent, both de jure and de facto;
  4. Whether the relocation would deprive the non-custodial parent of regular and meaningful access to the children;
  5. The impact of the move on the quantity and quality of the child’s future contact with the non-custodial parent;
  6. The motive for the move;
  7. The motive for opposing the move;
  8. The feasibility of preserving the relationship between the non-custodial parent and the child through suitable visitation arrangements; and
  9. The proximity, availability, and safety of travel arrangements.

The answers to these factor could determine whether or not the Court allows relocation with the child/children.

Time Is Money

Dealing Successfully With a Divorce Attorney

Star Telegram, April 16, 2006

Dealing with divorce and divorce lawyers is not much different than taking a trip without first plotting out the route. If you go to a matrimonial lawyer without specific objectives or goals in mind, and think he or she can fix it for you, you’ll be disappointed. Given a specific set of facts, lawyers are trained to apply the law and advise clients about ways to attain specific goals – or at least some of them.

Here are some basic guidelines:

1. Gather as much of your financial and other information as possible before you go to see your lawyer. This includes tax returns and schedules, financial statements, budget documents and the like from at least the last five years.
2. Make sure your fee arrangement is in writing, that you understand it before you sign, and that everyone understands how you will pay your bill. Generally, lawyers are not allowed to take a percentage of what is recovered for you in a divorce case, so expect to pay by the hour.
3. Since you won’t always need to talk to your lawyer when you have questions, meet and get to know the paralegal or secretary so you can give and get information billed at lower rates.
4. Write out your questions, then make an appointment with the lawyer and take notes about what you’re told.
5. If there are billing questions, talk to the billing clerk or the secretary who handles this aspect of the business. The lawyer should be the last resort.
6. Photocopies made at the lawyer’s office may cost you 25 or more cents per page, sometimes plus the time of the person making the copies. So for numerous copies, consider making your own at copy shops to save money.
7. If you don’t understand something, ask. And if you have a problem with the way your lawyer is handling your case, also ask. Don’t allow the issue to fester.
8. Your lawyer should keep you reasonably informed about the status of your case by sending you copies of what goes out of the office. Then you’ll be less likely to make emergency calls. Remember: Spur-of-the-moment calls just to find out what’s going on can get expensive.
9. Don’t second-guess your lawyer based on the advice of friends and family. But if you feel strongly about a point, seek a second opinion. Let your lawyer know you feel this way.
10. Remember that your lawyer works for you. After you have been fully informed and have reviewed your options, you and your lawyer should decide upon a course of action suitable to your situation.
11. Don’t be surprised if your case takes time to get resolved. Although everyone is in a hurry to complete his/her case, you will have no control over scheduling issues that can keep your case in limbo for a long time.
12. If your lawyer promises or guarantees you a result, get another lawyer

– Jan Collins, a writer and editor, and Jan Warner, matrimonial tax and elder-law attorney.

Collaborative Law Divorce – Because Your Family Deserves The Very Best

Maybe you’ve stumbled across this article because your spouse is talking about filing for divorce. You’re in “bunker mode” — feverishly searching the Internet for information about what to expect and, most importantly, how to protect yourself. Or perhaps you’re the one contemplating the divorce. Either way, if you live in Texas, you must educate yourself about collaborative law.

There are three ways to get divorced in Texas. The easiest is the uncontested divorce. Here both spouses sit down and reach an agreement on all issues. Often only one attorney is involved, and that attorney serves to execute the agreements in the form of an agreed upon final decree of divorce. The second and most common way for couples to divorce is the traditional litigation model. One spouse files. The other spouse is served. The parties have a temporary orders hearing and the posturing begins:

  1. “I want this.”
  2. “I deserve this.”
  3. “The kids should live with me.”
  4. “I’m entitled to [fill in the blank].”

Each side begins conducting discovery, attempting at every turn to devalue property they want, enhance the value of property their spouse wants and uncover bad facts about the other parent. Throughout the process both sides are preparing for war — the final trial. But the final trial rarely occurs. By the time the discovery process is completed, the parties are exhausted, terrified and out of money. The idea of risking a bad result at trial almost always leads the parties to settle, either informally or through mediation. The end result is a hodgepodge of what you think is your best day in court versus what the other side will agree to. You walk away thinking, “could I have done better?”

The third way to divorce in Texas is through the collaborative law model. In collaborative law, all of your energy is focused on the final agreement. Both parties and their attorneys sign a contract promising to resolve every issue outside of court. If an agreement cannot be reached, the parties must get new lawyers and start from scratch. The crux of collaborative law is the team approach to putting the puzzle together. It starts by setting goals. Every step after that is aimed at helping both of you reach those goals. With the help of a neutral mental health professional and a neutral financial professional, you eliminate the posturing. The entire team’s energy is focused on achieving goals that the parties disclose in the first meeting. It’s still a negotiation, but it’s interest-based — e.g., “I want our children to stay in their same school” — rather than positional — e.g., “Well, I’m keeping the house.”

Clients who have been through the process say that the team approach is much more comforting than knowing it’s just you and your attorney suiting up for war. But I caution you — this is not group therapy. It’s a difficult process. The good news is that your team of professionals is organized around only one mission — helping you and your spouse achieve your goals. Divorce is a scary place to be. Choosing from the very beginning to handle the restructuring of your family in a private and dignified manner will ensure you and your former spouse can continue to communicate and cooperate long after the divorce is completed.

The Internet is filled with information about collaborative law. One of the best sources is the Collaborative Law Institute of Texas website at www.collablawtexas.com. This site can answer your questions, let you hear from actual clients who have participated in the process and let you search for an attorney who is trained in collaborative law. Bailey & Galyen also has information about collaborative law on its website. If you’re in that scary place searching for information about a pending or impending divorce, do yourself a favor and educate yourself and your spouse about collaborative law. I know you won’t be sorry you took the time to do this research. Doesn’t your family deserve the very best?

Premarital Agreements

by R. Keith Spencer

Premarital agreements are contracts executed by fiancés, which become effective upon marriage. Their purpose is to clearly define the rights and property of spouses in the event of death or divorce. They are intended to prevent unnecessary litigation and unpleasantness. However, broaching the subject of premarital agreements is frequently difficult for people planning their weddings. Just like executing a will requires acknowledgement of mortality, a “prenup” admits that the marriage could end.

Generally speaking, property owned by the parties prior to the marriage is separate property and remains separate property thereafter. Property acquired during the marriage (except by inheritance) is community property that can be divided by the courts at the end of the marriage. Wages and retirement earned during the marriage are generally community property.

A 1948 constitutional amendment authorized Texas spouses to partition and exchange separate and community property. In 1980, another amendment authorized spouses to agree that income from separate property would remain separate property. Both of these provisions are common in premarital agreements today. Another popular provision provides that no community estate will be formed and the parties’ wages and other property will forever remain separate property.

Texas requires that all premarital agreements be in writing and signed by both parties. The terms of an agreement cannot be grossly unfair or unconscionable, and both parties must provide adequate disclosure of their assets and liabilities. The document must be signed by the parties voluntarily and without undue duress. Presenting your intended with a prenuptial agreement at the altar may render it unenforceable.

Only about three percent of first-time spouses execute prenuptial agreements, compared to about 20 percent of second-time spouses. A prenuptial agreement is vastly more important in cases where the parties own significant property prior to the marriage.

Parties contemplating marriage are encouraged to engage in candid and serious discussions about their finances and debts. It is not inappropriate to discuss your financial plans with your intended life partner. A Bailey & Galyen attorney will provide you with a free consultation to discuss prenuptial agreements and whether one would be appropriate in your circumstances. Arrange your free appointment as far in advance of the wedding as possible.

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What You Need to Know About Divorce in Texas

Texas Divorce Law

In Texas, a divorce can either be granted for “fault” or “no fault.”  In a “no fault” divorce, a party has to tell the Court that the marriage has simply broken down and that there is no hope for reconciliation.

A “fault” divorce in Texas is a divorce based on cruel treatment, adultery, conviction of a felony with imprisonment of at least a year, abandonment in excess of one year, living apart for at least three years, or confinement in a mental hospital for at least three years without hope of recovery.  A “fault” divorce is most likely when there are contested issues involving children or property and the other party’s past behavior should be taken into consideration by the Court.  At Bailey & Galyen, our experienced divorce attorneys will consider your case carefully to help you determine which type of divorce is right for you.

Bailey & Galyen provides a free initial consultation to all clients. To set up an appointment, contact our office by calling 1-866-300-1529 today.

Additionally, Texas divorce’s can either be contested or uncontested.  An uncontested divorce is one in which you and your spouse have agreed on all matters, both children and property related.  A contested divorce is one where there is not complete agreement.  A contested divorce is not necessarily a hostile one.  It simply means there is a disagreement that must be resolved.

Some of the child related matters that must be decided are:

  • the rights and duties of each parent;
  • the possession schedule for each parent
  • child support and health insurance for the child

Property issues that come along with a divorc include determining what property is community property and what property is separate property, the value of that property, the division of property and alimony/spousal support.

The child and property issues are most often resolved in one of three ways:

  • settlement through informal negotiations
  • settlement through mediation
  • final trial

Contact Bailey & Galyen Today

We answer our phones 24 hours a day, 7 days a week. You can contact our office by calling 1-866-300-1529 to set up a free initial consultation. Evening and weekend consultations are available upon request. Se habla Español.