A disabled veteran won a U.S. Supreme Court case last month. The ruling means that his ex-wife will receive less in military retirement benefits each month. The ruling could also affect other disabled veterans when it comes to how much of their retirement pensions they need to split with their exes.
In this case, Howell v. Howell, the disabled veteran qualified as 20 percent disabled in 2005, making him eligible to receive disability benefits. However, those who are less than 50 percent disabled cannot receive a veterans disability check and their veterans retirement pension at the same time. Since disability benefits are tax-free, the veteran elected to receive the disability benefits in exchange for a reduction in retirement benefits.
Receiving the tax-free disability benefits in exchange for reducing his retirement benefits brought the veteran another perk. Disability benefits are separate funds, not marital funds, so they are not divisible as a part of the marital estate and Mr. Howell would not have to share them with his ex. Also, because his retirement benefits would be reduced, it meant that his ex-wife would be receiving $125 less each month as a part of their court-ordered 50/50 retirement benefits split.
Due to this legal loophole, some states require disabled veterans to make an additional payment to their exes to offset the benefits reduction experienced by their ex-spouses. However, in this case, the Supreme Court ruled that Mr. Howell cannot be obligated to make such a payment to his ex.
Do you have questions about your military benefits and divorce? A Tennessee divorce attorney can advise you of your legal rights and options.
Source: Military Times, "Supreme Court rules in veteran's favor in closely watched divorce settlement case," Shawn Snow, accessed June 16, 2017