(This article by financial expert Kimberly Lankford originally appeared in the August 2022 issue of Military Officer, a magazine available to all MOAA Premium and Life members. Learn more about the magazine here; learn more about joining MOAA here.)

The finances of divorce are complicated enough, and special military benefits and rules add an extra layer of complexity. Both the servicemember and spouse need to understand the special procedures and protections to make sure they are not missing out on valuable benefits.

“Divorce can cause financial hardships, but knowing how to protect yourself ahead of time is key,” said Lt. Col. Josh Andrews, USAF (Ret), CFP®, advice director for military life, investments, and education for USAA.

A 2017 Census Bureau study ranked the military among the top 10 jobs with the highest divorce rate, Andrews said, and deployment can place extra stress on a marriage. He said he saw this when he was an Air Force fighter pilot; his squadron had high divorce rates during combat.

Because military members have access to special benefits, it’s important to work with a divorce lawyer who is familiar with the military rules and legal protections.

“There are so many variables that it is best to deal with each individually first and then look at the whole,” said Lt. Col. Patrick Beagle, USMC (Ret), president of WealthCrest Financial Services in Springfield, Va.

Special Rules for TRICARE, Commissary, and Exchange Access

The Uniformed Services Former Spouses’ Protection Act (USFSPA) sets a time frame for when a former spouse is eligible to continue TRICARE health coverage and other benefits, such as access to the commissary and exchange.

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The 20/20/20 rule: An un-remarried former spouse is eligible to continue TRICARE benefits and access the commissary and exchange if they were married to the servicemember for at least 20 years at the time of the divorce, if the servicemember performed at least 20 years of eligible service, and their 20 years of marriage overlapped with those 20 years of service, said Andrews.

The 20/20/15 rule: If the couple was married for 20 years and the servicemember did 20 years of service, but the marriage only overlapped with 15 years of service, then the former spouse doesn’t get access to the commissary and exchange, and only gets TRICARE for one year, said Andrews.

Other options: If you don’t meet the 20/20/20 or 20/20/15 requirements, the civilian former spouse typically loses their military ID card and access to the commissary, exchange, and TRICARE when the divorce is finalized. However, they may be able to purchase up to 36 months of coverage through the Defense Continued Health Care Benefit Program, which is like civilian COBRA. Compare that to the cost of getting coverage on your own or through an employer, if eligible.

“You might be able to find it cheaper elsewhere,” said Andrews. Budget for extra out-of-pocket costs after you lose TRICARE. “If you were used to TRICARE, you’re probably going to get into a civilian health plan that will have premiums, deductibles, and other expenses, which affects your budget,” he said.

Options for Military Retirement Pay

The rules for splitting up military retirement pay generally are based on state laws and determined by the divorce order. However, the Uniformed Services Former Spouses’ Protection Act can affect how that benefit is paid.

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The 10/10 rule: If you were married for at least 10 years and the servicemember performed at least 10 years of military service — and if the ex-spouse is awarded any military retirement pay as part of the divorce order — then the ex-spouse will receive that money directly from the Defense Finance and Accounting Service (DFAS), said Andrews.

This rule doesn’t affect whether the former spouse will be awarded any retirement pay — that is based on state laws and the divorce order; it just determines whether the DFAS or the retired servicemember has to send the money.

“You could only be married for eight years, and the judge could say you’re getting 25% of the military retirement,” said Andrews. “But if you don’t get the 10/10 rule, then DFAS doesn’t have to send it directly to them.”

Even if the former spouse is awarded a portion of future retirement pay, there’s no guarantee that they’ll receive the money — if the servicemember separates from service before qualifying for military retirement (usually at 20 years), there will be no retirement pay to distribute.

“Don’t rely upon it,” said Andrews. “Say you get divorced at 12 years and you’re going to get 50% of the retirement pay — don’t rely on that for your planning until it comes.”

The divorce order also determines whether the former spouse must receive retirement pay after the servicemember dies through the Survivor Benefit Plan (SBP). You or the former spouse generally have one year after the date of the divorce to notify the DFAS, provide a copy of the divorce order, and declare a claim for Former Spouse SBP coverage. Find more information at www.dfas.mil.

What happens to a Thrift Savings Plan account is a separate issue — that is usually divided up based on a court order.

How Your Housing Allowance May Change

Your benefits for housing may change significantly after a divorce. The civilian former spouse will no longer receive Basic Allowance for Housing (BAH) benefits, and the servicemember’s BAH may go from “with dependents” to “without dependents” if they don’t have custody of the children.

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There’s a third type of benefit, BAH-DIF, that may be paid to divorced servicemembers who are assigned to single-type quarters but must pay child support.

“That is BAH that the military member will receive if they’re required to pay child support but don’t have custody of the child,” said Andrews.

Be sure to understand how this tax-free benefit will change when negotiating the divorce and creating a post-divorce budget.

If both spouses are servicemembers, many divorce-related rules don’t apply because there is no non-military spouse. However, the BAH may change from BAH with dependents to single BAH.

“Also, depending on their age and rank, it might mean moving into the on-base barracks when they might have lived in privatized housing or rent[ed] off base since they were married,” said Andrews.

Other New Expenses After a Divorce

In addition to new housing expenses, some other related bills may change, too. Even though the military usually pays for military-related moves, the non-military spouse may need to pay the expenses to move after the divorce. The military may pay for the non-military spouse to return home if stationed overseas, and other moving expenses may be determined by the divorce settlement, said Andrews.

Another expense to keep in mind is insurance. You and your former spouse should budget for different insurance bills after you split into two households and don’t have joint policies anymore, including separate car insurance and homeowners or renters coverage.

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“This is often a financial expense that increases as a result of a divorce,” said Andrews. For a divorcing couple covered by USAA, the non-military spouse can keep USAA membership even after the divorce if the USAA membership had been established through the military spouse, he said.

Understand Your Special Legal Protections

The Servicemembers Civil Relief Act (SCRA) provides legal protections for servicemembers. One provision lets active-duty servicemembers request a stay of proceedings if they can’t attend because of their military obligations, which can delay divorce proceedings until they are available.

“It protects the military member,” said Andrews. “There were times when a spouse would wait to drop divorce papers when the military member was in Afghanistan knowing they couldn’t come back” to defend themselves, he said.

To request the stay of proceedings under the SCRA, you must provide the court with a letter or other communication showing how military duties affect the servicemember’s ability to appear in court, and stating a date when he or she will be available, said Col. Mark E. Sullivan, USAR (Ret), a retired JAG colonel who practices law in Raleigh, N.C., and is the author of The Military Divorce Handbook, published by the American Bar Association.

The SCRA also requires a letter or other communication from the servicemember’s commanding officer stating that current military duty prevents the servicemember’s appearance, and that military leave is not presently authorized, he said.

Find a Military Divorce Lawyer

The JAG office on base can help with many legal issues when you’re in the military and can provide information about the military divorce-related rules, but they can’t represent you in divorce court. So, look for a divorce lawyer who is familiar with the special rules for military divorces.

“It’s absolutely critical to educate yourself and surround yourself with people well-versed in military divorce and finances,” said Beagle. “While you hope for an amicable settlement, you also need to understand what the rules are, what the negotiable terms should be, and how to make sure you don’t unknowingly give away the farm.”

Contact your local bar association for lawyers in your area specializing in military divorce, or ask if any specialists have given presentations on the topic, said Sullivan. Some divorce attorneys who don’t specialize in the military may work with another lawyer who does.