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Phoenix AZ Family Law Blog

Sunday, April 16, 2017

Arizona Post-Divorce Pension Grab Case Seeks Highest Court Ruling

Q: Can a former spouse claim a share of a veteran’s disability benefits?

When a couple gets a divorce, there are several issues that need to be settled. Depending on the party’s particular circumstances, those issues may include deciding child custody and visitation, child support, spousal maintenance or support, and the division of marital property.

Marital property is property acquired during the marriage regardless of which spouse owns or has title to the property.

In Arizona, a community property state, the court will equitably divide any property or assets a couple acquired during their marriage at the time of their divorce. Equitable does not necessarily mean equal, however the court does aim for close to a 50-50 division as possible. (They feel the same way in most cases on child custody, visitation, and support, too.)

The division of assets can be complex depending on the nature and amount of the couple’s assets. Assets subject to division include such things as houses, rental property, stock, businesses, and more. They may also include retirement and pension plans, which isn’t generally problematic—unless it involves a veteran’s disability and retirement pension.

Since the Uniformed Services Former Spouses Protection Act was passed in 1982, ex- spouses have been able to get at half of the veteran’s pension. In 1989, the US Supreme Court ruled that a former wife was not entitled to her ex-husband's veteran’s disability benefits. Veterans forfeit part of their pension in order to obtain disability benefits. In the 1989 Supreme Court case, the forfeiture happened prior to the couple’s divorce.

What if a veteran forfeits part of his pension to obtain disability benefits after the divorce is final, resulting in a cut to his pension and a corresponding decrease in his ex-wife's monthly payment?

This issue has been the subject of one Arizona couple’s post-divorce court battle. Years after the divorce was final, the husband took a cut in his pension in order to receive veteran’s disability benefits. When his pension was cut, so was the payment he made to his ex-wife, resulting in the lawsuit. Every court in Arizona found in favor of the ex-wife ruling that "she had a right to half of his total benefits, pension and disability".

The US Supreme Court will be asked to hear the case, deciding who is right not only in this particular case, but also deciding whether state or federal law should govern similar cases in the future.

Arizona is one of five states that allow ex-spouses access to a veteran’s disability. Five other states do not. Obviously, clarification and standardized application of the law governing veteran’s disability and pension benefits and spousal support is needed so both parties to a divorce are protected from unexpected reductions in spousal support years after their divorce.

If you are considering divorce, you need an experienced and compassionate family law attorney. Call Cohen Family Law today at 602-714-8898 for a free consultation. From our offices in Phoenix, we have been helping clients throughout Arizona since 1982.

 


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