We were nearing the end of a one-hour initial interview when it happened—that moment where a single comment changes everything. We’ve all been there in various contexts – the client who asks “does it matter if I’m still married to my ex?” (yes, this actually happened), or perhaps the client who says “what about custody?” at the very end, when they haven’t mentioned a child or children for the entire meeting.
Here, the military servicemember had been explaining to his local counsel that he anticipated retiring from the Army in only three months. He added that final confirmation would come once the PEB report was issued.
“PEB—as in Physical Evaluation Board?” local counsel asked. He confirmed.
And just like that, the nature of the case shifted. Up to that point, nothing had indicated that the servicemember, John Doe, was facing anything other than a standard 20-year retirement. But now it was clear: he wasn’t voluntarily retiring—he was being medically retired due to a service-connected disability. That distinction carries enormous legal and financial implications in military divorce cases.
Throughout the interview, counsel addressed the usual components: how to draft the Military Pension Division Order (MPDO), what marital share the spouse might receive, what data points were required, when payments would begin, and how to phrase the division order. But now, we had to reconsider everything.
Under Chapter 61 of Title 10, U.S. Code, a servicemember medically retired due to disability receives retired pay calculated in one of two ways: (1) a percentage of disability, or (2) years of service. The member is entitled to elect between the two. See 10 U.S.C. § 1401(a). If John, our servicemember client, chooses the longevity formula, only the portion exceeding the disability-based amount may be divided. If the disability percentage yields a higher figure and is selected, the entire retired pay is classified as disability pay and is non-divisible under federal law. See 10 U.S.C. § 1408(a)(4)(A)(iii).
This issue—surfacing in the final five minutes of what everyone thought was a routine interview— would completely alter the trajectory of any experienced lawyer’s case strategy. The discussion continued for nearly another hour as we revisited multiple legal concerns: disclosure obligations to opposing counsel, discovery compliance, spousal support considerations, potential Rule 60(b) motions to set aside a settlement based on fraud or misrepresentation, and implications under the Rules of Professional Conduct.
The takeaway was clear: in any military divorce case involving retired pay, counsel must first determine the nature of the retirement benefit before negotiating division. Failure to do so may lead to critical oversights with long-term consequences. Stated differently, military retired pay is not simply 50% times the marital share. An additional element, that is the character of the retied pay, must be considered.
Servicemembers retire under Chapter 71, Title 10—i.e., based on active duty alone – in many cases. Unless the servicemember is receiving retired pay on date of divorce or the divorce was before December 23, 2016, the MPDO must specify the member’s years of service and High-3 pay as of the date of divorce. This ensures compliance with the frozen benefit rule and avoids DFAS rejection.
Attorneys must also evaluate how to calculate the marital share of retired pay. If the retirement is based on both active duty and Reserve/Guard time, the marital fraction may need to be calculated using both time and retirement points. Each party may advocate for the method yielding the most favorable outcome. Keep in mind that calculations may involve “extra Section 1405 service”—points earned from drills and other qualifying service not reflected in active-duty time alone. See 10 U.S.C. § 1405.
For servicemembers retiring under Chapter 1223 (Guard/Reserve retirement), similar considerations apply, but with some key distinctions. Instead of “years of service,” the relevant metric is retirement points. If the member is still drilling, the denominator of the marital fraction remains unknown, and must be represented as “X.” A formula clause is often appropriate in these cases, but must reflect military-specific language based on points, not time. When the denominator is not known and based upon a future event, such as the total points or creditable service on retirement, attorneys should tread carefully to avoid a double division.
In addition, when the member is already in “pay status”—receiving monthly retired pay—counsel should investigate whether any arrears are owed to the former spouse. For example, if the parties have been separated for a period of time before the division order is entered, retroactive pension-share payments may be at issue. Alternatively, the member may be entitled to offset any support or marital expenses previously paid from the pension.
When the member’s retired pay is based entirely on disability, it may not be divisible at all under federal law. If this issue is not identified during the client intake or initial interview, or certainly before the case is resolved, significant complications can arise post-judgment. DFAS may reject the MPDO with a simple explanation: the pay is not subject to division. This can trigger post-decree litigation under Rule 59 or Rule 60, a contempt motion, or even an ethics or malpractice complaint against the drafting attorney.
The most effective way to avoid such pitfalls? Begin with the right question: What is the nature of the retired pay at issue?
Whether representing the servicemember or the non-military spouse, it is essential that attorneys understand what they are dividing before negotiating terms or preparing a division order. The cost of overlooking this foundational point can be significant—not just for the client, but for counsel as well.
