HOW DISABILITY CLAIMS CAN IMPACT THE DIVISION OF MILITARY RETIRED PAY IN A VIRGINIA DIVORCE

By: Grant T. Moher, Esq.

If you are a military member or the spouse of a military member going through a divorce in Virginia, military retired pay is almost certain to be an important factor.  Disability pay can also be a component of a servicemember’s compensation – one that is typically intertwined with a military member’s disposable retired pay.  Disability pay is typically non-taxable to the servicemember.  Disability pay is also not typically divisible by a court.  For these reasons, you should have a clear understanding of the way in which a disability claim can affect a military pension, and ensure that your attorney does as well.

There are three separate systems for military disability benefits: 1) Military disability retired pay; 2) Veteran’s Administration (VA) disability compensation; and 3) Combat-Related Special Compensation (CRSC).  You should be aware of all of these, and how they may affect your situation:

  • Military Disability Retired Pay. This pay is available for servicemembers who become disabled such that they cannot perform their assigned military duties.  If a servicemember has enough creditable service, he or she may be able to draw this type of disability pay.

 

There are three steps to determining the rate of this disability pay.  For the sake of example, assume the servicemember has an active duty base pay of $4,000 per month, 20 years of creditable service, and a disability rating of 60%. To determine the calculation, first, calculate the servicemember’s normal retired pay based on his or her years of service.  Let’s assume for this calculation that this number is $2,800. Then, multiply his base pay times his disability rating ($4,000 x 60% = $2,400). The servicemember receives the higher of these two amounts so in this case, he would receive a total of $2,800.  However, only the difference between these two amounts (i.e. $400) would be divisible by a court in divorce proceedings.

 

  • Veteran’s Administration (VA) Disability Benefits. These benefits are the most common, and arise when the extent of the disability is not so great as to qualify the servicemember for Military Disability Retired Pay and/or is detected after retirement.  The extent of disability benefits a servicemember receives can have a significant impact on whether the former spouse’s share is affected.

 

If a servicemember makes a successful claim for VA Disability, and is determined to be less than 50% disabled, the VA Disability Benefits received reduce the amount of the disposable military retired pay dollar-for-dollar.  Take, for example, a servicemember receiving $4,000 per month in disposable retired pay, and he and his former spouse are dividing that evenly, so each receives $2,000.  If the servicemember files a successful VA Disability claim and receives $750 in benefits, that $750 would be reduced from the $4000.  This would mean the servicemember would receive $2,375 in combined disposable retired pay by the VA Disability, and the former spouse would receive $1,625.

 

However, if a servicemember is 50% disabled or more, Concurrent Retirement and Disability Pay (CRDP) kicks in.  With CRDP, the servicemember receives both his or her disposable retired pay and VA Disability Pay with no offset.  Under the scenario above, the former spouse would continue to receive $2,000, while the servicemember would receive $2,750.

 

  • Combat-Related Special Compensation (CRSC). This compensation is awarded to anyone who has a disability of at least 10% that is directly related to the award for a Purple Heart decoration or a disability rated at 10% or higher related to combat, operation, or hazardous duty.  Like CRDP, any CRSC received is in addition to disposable retired pay.

As you can see, it’s possible that a servicemember can drastically reduce or even eliminate the former spouse’s share of disposable retired pay by applying for disability.

Until recently, some Virginia courts took the position that even though they couldn’t require the military to pay disability to a former spouse, they could order the servicemember to indemnify the former spouse if he or she ever claimed disability and in doing so, reduced a former spouse’s entitlement to disposable retired pay.  However, this option is no longer available.

The United States Supreme Court in Howell v. Howell, 137 S. Ct. 1400 (2017) held that such indemnification orders were unconstitutional.  A state divorce court couldn’t do indirectly (require indemnification for a disability claim) what it couldn’t do directly (require the military to pay a portion of a servicemember’s disability pay to a former spouse).

It can be a nasty shock for a former spouse’s share of retired pay to be reduced or eliminated due to a servicemember’s receipt of disability pay – a risk that a former spouse assumes if their divorce case goes to trial. So what can be done?  In the wake of Howell, there are several options, but all require a Settlement Agreement where a case does not go to trial:

  1. Add an indemnification clause to the Agreement that resolves the case. This would require the servicemember’s consent, of course, but if the servicemember is willing to agree to an indemnification clause, that clause would likely be enforceable.

 

  1. Ask for an additional award of spousal support. If disability pay is already being received at the time of divorce, the former spouse could ask the court to award additional spousal support to account for the disability payments received by the servicemember party.

 

  1. Ask for a reservation to seek spousal support in the future. If the servicemember has not yet retired and claimed disability, but may do so in the future, a former spouse can ask the court to reserve his or her right to receive spousal support in the future.  That way, the court can reevaluate the parties’ financial positions if disability is claimed after retirement, and make a spousal support award accordingly.

 

These are clearly complex issues that require careful consideration and extensive knowledge of the nuances of a military divorce. Whatever your situation, if you are a military member or military spouse going through separation and divorce, you should ensure you work with a divorce attorney who is experienced in military issues.

Contact one of Curran Moher Weis’s expert attorneys who can help you navigate and ensure you are protected in a military divorce.  Set up a consultation here.

 


HOW FEDERAL EMPLOYEES’ GROUP LIFE INSURANCE SPOUSAL BENEFITS WORK IN A VIRGINIA DIVORCE

 

By Grant T. Moher, Esq.

Divorcing parties have essentially always been able to agree to maintain life insurance for one another, and for the court to enforce those agreements.  Until recently, though, Virginia courts have not had the ability to require a spouse to maintain life insurance for the other absent the parties’ agreement.

Now, section 20-107.1:1 of the Virginia Code is in effect, and Virginia courts have the ability to require spouses paying support to maintain a policy of life insurance to benefit the recipient spouse.  Virginia has a large federal workforce, and federal employees are covered by the Federal Employees’ Group Life Insurance Program (“FEGLI”).  Under section 20-107.1:1, can a court now require a federal employee who has a spousal support obligation to name his or her former spouse as a beneficiary of some or all of his or her FEGLI policy?  The answer is yes.

I have spoken to a great many family law practitioners who are not aware of the current federal laws regarding FEGLI, and who believe that state court orders requiring the designation of beneficiaries on FEGLI policies are not enforceable due to the law of federal preemption.  While this was once true, it is no longer the case and has not been the case for 20 years.

The following is a description of the evolution of the law regarding FEGLI, and sheds light on why it is not commonly known that court orders to require the maintenance of FEGLI policies are, in fact, enforceable:

In Ridgeway v. Ridgeway, 454 U.S. 46 (1981), Army Sergeant Ridgway and his former wife got divorced in Maine.  The Maine divorce decree required Sergeant Ridgway to maintain the parties’ three children as beneficiaries on his Servicemembers Group Life Insurance (“SGLI”) Policy provided to him through his employment with the Unites States Army.

Sergeant Ridgway remarried and changed his SGLI policy to provide for payment of the death benefit to his new wife.  Sergeant Ridgway died, and the state court had to confront the question of who should receive the death benefit.  Ultimately, the United States Supreme Court held that the death benefit must be paid to Sergeant Ridgway’s new wife, because to hold otherwise would run afoul of the Supremacy Clause of the United States Constitution, which dictates that federal laws trump state laws where there is a conflict between the two.  In so holding, the Court found that the federal law of SGLI, which provided that a servicemember’s beneficiary designation controlled how his or her SGLI benefits were paid, trumped the Maine state court order requiring a different beneficiary to receive payments.

At the time of the ruling, FEGLI operated essentially the same as SGLI, so at that time, a state court order requiring the naming of a life insurance beneficiary could not override the employee’s beneficiary designation on file with the Federal Government’s Office of Personnel Management (“OPM”).

The law regarding FEGLI beneficiary designations was changed, however, in 1998.  That year, the United States Congress passed Public Law 105-205, which provided for the first time that state court orders directing the maintenance of insurance and the naming of beneficiaries overrode the employee’s beneficiary designation.  The only caveat to this was that to be effective, the state court order had to be transmitted to the employee’s agency (or to OPM generally if the employee was retired) prior to his or her death.  Subsequent regulations interpreting Public Law 105-205 published on April 6, 1999 describes the change in the law as follows:

The Federal Employees’ Group Life Insurance (FEGLI) law sets an order of precedence for payment of benefits following the death of an insured employee, annuitant, or compensationer (5 U.S.C. § 8705). First in the order of precedence is a designated beneficiary. There has been no statutory limitation on changing designations.  When a divorce decree requires an individual insured under FEGLI to name his/her children or former spouse as the beneficiary, it is possible the individual may not comply or may comply and then change the designation at a later date. This action, while potentially in violation of the court order, did not violate the FEGLI law.

 

Pub. L. 105-205, 112 Stat. 683, enacted July 22, 1998, requires benefits to be paid in accordance with the terms of a court decree of divorce, annulment, or legal separation, or the terms of any court order or court-approved property settlement agreement relating to a court decree of divorce, annulment, or legal separation, regardless of whether or not the insured individual actually completes a designation complying with the court order, if the court order is received in the appropriate office before the death of the insured individual. To the extent provided in the court order, the court order supersedes any prior designation by the insured individual. Pub. L. 105-205 also prohibits an insured individual from changing his/her designation, unless the person(s) named in the court order agrees or unless the court order is subsequently modified by the court that originally issued it.

Why, then, do so many practitioners believe that court orders directing FEGLI beneficiaries can be overridden?  The answer likely lies with the Federal Government’s published Handbook for Attorneys on Court-ordered Retirement, Health Benefits and Life Insurance.

The Handbook was originally published by the Federal Government to educate attorneys on the various retirement, health, and life insurance benefits enjoyed by Federal Government employees, as well as to assist attorneys in generating the proper forms to divide the benefits between divorcing spouses.  (The Handbook can be found on OPM’s website, www.opm.gov. Regarding FEGLI, it provides that beneficiary designations can be changed by the employee at any time.)

However, the handbook was last updated in 1997 – a year before Public Law 105-205!  The Federal Government has simply never gotten around, in the last 20 years, to updating the Handbook to reflect the current state of the law regarding FEGLI beneficiary designations.

It should be noted, however, that the Federal Government does not appear to have enacted a provision similar to Public Law 105-205 for the SGLI policies that cover military members.  Thus, a court order requiring a divorcing Servicemember to designate his or her former spouse as a beneficiary under his or her SGLI would not survive the Servicemember’s later decision to change his or her beneficiary.

It is essential to hire a divorce attorney who is knowledge about the nuances and complexities of family law. The experienced attorneys at Curran Moher Weis make a point to stay up to date on these matters, and to serve as an educated, supportive guide for our clients as we navigate their divorce together.

If you are a federal government employee or spouse pursuing a divorce, contact us to discuss a plan that will set you up for as successful and painless of a process as possible.


How Holidays Work in Divorces and Child Custody Cases

By Grant T. Moher, Esq.

A New Year is almost upon us, and couples going through a separation or divorce this season are likely experiencing the difficulty of agreeing to holiday custody and visitation agreements. With a New Year comes another 12 months of special days that divorcing, or divorced, parents have to determine how to manage – from Christmas, to Federal holidays that result in long weekends, like Martin Luther King, Jr., Day and President’s Day, to children’s birthdays and summer school breaks.

As you plan for the year ahead, this blog will help you better understand how holiday visitation schedules work for these unique situations.

  1. Federal Monday Holidays

Often, parents want to evenly divide Federal Monday holidays (e.g. Martin Luther King, Jr. Day, President’s Day, Memorial Day, Labor Day, etc.) – even if the weekend that Monday follows was spent with the other parent. Unless there is a very important reason for this, it is typically better for children to spend Federal Monday holidays with the parent with whom they spent that adjacent weekend. This facilitates out-of-town travel and activities that may run from the weekend into the holiday and makes it easier on and less disruptive to the children.

  1. Children’s Birthdays

Sometimes parents want language in an agreement obligating both parents to share time with the children on their actual birthdays or celebrate the birthdays together. There are important factors to consider to make this approach work. If parents are getting along well enough to have a joint birthday party for the children, they don’t need an agreement to force them to do it. If parents do not have such a relationship, forcing a joint party or negotiating a split of time on the actual day can result in a tense and unpleasant atmosphere. If parents aren’t on terms that allow them to have an amicable joint celebration, a better scenario is for each parent to have an individual celebration for the child on his or her time, such as on the nearest weekend.

  1. Summers

Commonly during summers, parents will each have some uninterrupted weeks with the children. Depending on the level of cooperation between the parents, agreements may need to include provisions for how those weeks will be determined. In situations where parents are likely to disagree on weeks, there are several methods of resolving disputes. For example, some choose to state that in odd-numbered years (2019, 2021, etc.) one parent’s chosen weeks take precedence, and in even-numbered years the other parent’s preferences take precedence.

Another possibility is to require that a parent’s week start and end on a particular day that encompasses his or her already-scheduled weekend. The upside to this approach is that it is impossible for the parents to schedule weeks that conflict with each other. The downside is that a major event (e.g. a wedding or family reunion) may fall outside of these potential weeks.

Since events come up, and other situations could occur that need advance planning, such as summer camps, I typically advise parents to give notice of their chosen weeks as early as reasonably possible in the New Year. There is nothing to guarantee both parents will agree to those weeks and that further issues won’t arise, such as when parents do not provide ample notice of their preferred weekends, language can be built into agreements to get ahead of this.

  1. Thanksgiving and the issue of three weekends in a row

Where parents have a regular schedule that involves alternating weekends and the custody schedule provides that Thanksgiving encompasses both the holiday and the weekend immediately following it, one party or the other can end up having three weekends in a row with the children. This happens if one parent’s Thanksgiving falls on the other’s weekend. Sometimes parents are fine with this. However, if they are not, the good news is there are multiple ways to solve this.

One way is to make Thanksgiving encompass only the Wednesday through Friday of the holiday and not the weekend. This solves the problem of three weekends in a row, but this may not be desirable when one or both parents customarily travel over the holiday and want the entire weekend to do so. Another option is to “reset” the schedule if it were to result in one parent having three weekends in a row, such that the weekend immediately following Thanksgiving weekend would switch to the parent who did not have the children over Thanksgiving weekend and the weekend immediately prior to it.

  1. Spring break

It is customary in custody schedules to make provisions for spring break.  Children and their parents often travel during this week as it is normally the longest break schools have between winter break and summer recess.  Some custody schedules alternate the entirety of spring break each year and some schedules split the spring break in half, with each parent having time with their children.  Whether you choose to alternate or split spring break, it is critically important to define exactly which days spring break covers.  Most school calendars define spring break as the Monday through Friday of the week, leaving off the weekends.  Thus, if the intention is to include the immediately preceding or following weekend, the custody schedule must clearly define this.  The same is true if the custody schedule splits the spring break week in half; parents need to know what the start and end date is to calculate the halfway point.

Example of a Holiday/Summer Schedule:

While holiday/summer schedules can be adjusted in virtually any way, sometimes people want to begin with a generic template to give them an idea of how to start. The following is a common schedule that can be modified, and can at least give a basic idea of how such schedules can look.

Note, the following is provided for example purposes only. Visitation schedules must be developed and tailored to meet the unique needs of each couple and their child(ren). It is important to seek support from a family law attorney with extensive experience counseling on the best visitation schedule for you.

A.  Holiday Visitation

Holiday visitation shall be as set forth below. To the extent that the holiday visitation set forth below conflicts with the regular weekly custodial schedule, the holiday visitation shall supersede it.

  1. Spring Break
    The parties shall alternate the children’s school Spring Break each year, defined as 5:00 p.m. on the Sunday after school releases until 5:00 p.m. the Friday before school reconvenes. Father shall have Spring Break in even-numbered years. Mother shall have Spring Break in odd-numbered years.
  2. Thanksgiving
    Thanksgiving shall be defined as the time school lets out on the last day of school before the Thanksgiving holiday until 5:00 p.m. on the Friday immediately following the holiday. Mother shall have the children for Thanksgiving in odd-numbered years. Father shall have the children for Thanksgiving in even-numbered years.
  3. Winter Break
    The children’s winter break from school shall be divided in half. In odd-numbered years, Mother shall have the children for the first half of the winter break, and Father shall have children for the second part of the winter break. In even-numbered years, Father shall have the children for the first part of the winter break, and Mother shall have the children for the second part of the winter break.
  4. Fourth of July
    The parties shall alternate the Fourth of July holiday each year, defined as 10:00 a.m. on the holiday until 10:00 a.m. the next morning. Mother shall have Fourth of July in odd-numbered years. Father shall have Fourth of July in even-numbered years.
  5. Father’s Day
    In all years, Father shall have the children from 9:00 a.m. until 5:00 p.m. on Father’s Day.
  6. Mother’s Day
    In all years, the mother shall have the children from 9:00 a.m. until 5:00 p.m. on Mother’s Day.

 

B.  Summer Visitation

Each parent shall have the children for two (2) uninterrupted weeks during the summer, which may be taken consecutively. Each parent shall designate their week by April 1st each year. If the parties’ chosen weeks are in conflict, mother’s choice shall control in odd years and Father’s shall control in even years. Unless otherwise agreed in writing, weeks shall start at 5:00 p.m. on the Friday beginning a party’s weekend, and continue through the following Friday at 5:00 p.m.

Visitation schedules can be complicated and can cause tensions to run high amongst parents. The attorneys at Curran Moher Weis have decades of experience in guiding parents through negotiating a custody and visitation schedule that is optimal for parents and most importantly, their children. Contact us for more information, and check back on our blog regularly for the latest advice on this and other important divorce and custody matters.


How Current Political Tensions are Impacting Marriages

Politics have always been a hot button issue, but the current divisions in our country seem especially pronounced.  A new national poll from Wakefield Research indicates that the tense political environment, particularly differing views over President Trump’s election and platforms, is causing rifts in marriages and relationships like never before.


UPDATE: Adultery, “Crimes Against Nature,” and the Fifth Amendment in Virginia

I originally wrote my article on adultery in Virginia in 2006 and updated it for publication in Virginia Family Law News in 2009. Since that time many prospective clients (and more than a few fellow attorneys) have contacted me to discuss the rather thorny legal issues that have surrounded the issue of adultery in Virginia. The law has now changed, however, so if you read my original adultery article here you should also read this update.

Adultery and the Fifth Amendment in Virginia

Adultery (which is defined as male/female sexual intercourse only) is still a crime in Virginia for the married participant, although one which is rarely, if ever, prosecuted. This means that under certain circumstances the married participant may “plead the Fifth” and refuse to answer questions regarding adultery. However, the law has changed with respect to section 18.2-361 of the Virginia Code — the so-called “crimes against nature” or “sodomy” statute. As you may have seen in my prior article, this statute used to make it a felony for people to engage in a whole range of sexual contact, including oral sex and same-sex acts. This allowed people to “plead the Fifth” to this conduct as well. This statute, however, was amended in 2014 to remove the prohibition on sexual contact between non-related consenting individuals.

What does this mean? Broadly, it means people can’t refuse to answer questions about same sex conduct in divorce proceedings anymore. If you think this may apply to your situation, you should consult with an experienced Virginia Divorce Attorney who is well-versed on issues of adultery and the Fifth Amendment.


Top 5 Things to Consider about Paying for College in a Virginia Divorce Proceeding

virginia divorce pay for college

If you’re getting divorced in Virginia and have minor or college-age children, paying for higher education expenses can be a significant issue. Here are the top five things you should know about college expenses and divorce:

1. A Court Can’t Order You to Pay for College Tuition.

In Virginia, a court cannot require either parent in a divorce proceeding to pay for their children’s college expenses. If the parties have a written agreement to pay for their children’s college expenses the court can enforce that agreement. But absent such an agreement, the court has no authority to require either or both of the parties to pay for college. If you want your spouse to agree to contribute to college costs, it’s only logical that he or she would seek to require you to do the same. So the first question you have to ask is: do I want us both to be contractually bound to pay college expenses?



Holiday Visitation

holiday visitation

Holiday Visitation Custody

Holiday and summer schedules can often be a source of conflict between divorcing parties. The following are some common issues that can arise in crafting custody and visitation agreements, and potential solutions for them.

1. Thanksgiving and the issue of three weekends in a row

Where parties have a regular schedule that involves alternating weekends and the custody schedule provides that Thanksgiving encompasses both the holiday and the weekend immediately following it, one party or the other can end up having three weekends in a row with the children. This happens if Parent A’s Thanksgiving falls on Parent B’s weekend. Sometimes parents are fine with this. However if they are not, this issue can be solved in several ways. One way is to make Thanksgiving encompass only the Wednesday through Friday of the holiday and not the weekend. This solves the problem of three weekends in a row, but this may not be desirable when one or both parents customarily travel over the holiday and want the entire weekend to do so. Another option is to “reset” the schedule if it were to result in one parent having three weekends in a row, such that the weekend immediately following Thanksgiving weekend would “reset,” or switch to the parent who did not have the children over Thanksgiving weekend and the weekend immediately prior to it.


Equitable Distribution of Property in Virginia: What is “Hybrid” Property, and How is it Divided?

Do the words “Brandenburg,” “Keeling,” or “reasonable rate of return,” mean anything to you? Probably not — but if you’re going through a divorce, they had better mean something to your attorney! Each is a different method that has been used by Virginia courts to divide hybrid property between spouses.

First of all, what is property?

“Property” is a general term that includes everything of value owned by two married people. It can include real estate, bank and investment accounts, retirement accounts, pensions, stock options – even “intangible property,” like the right to profit from patents or books written by a party.

Ok, so what is hybrid property?

In a Virginia divorce case, property owned by either party, or both parties together, can be classified by a court in one of three ways: marital, separate, or a combination of the two, known as “hybrid.” Marital property is generally any property acquired during the marriage, by either party individually or by both parties together, regardless of how the property is titled. Separate property is generally any property acquired by a party before the marriage; acquired during the marriage if by gift from a third party, inheritance, or other source outside the marriage; or acquired after separation.
Hybrid property is a combination of marital and separate property. It can occur in many forms, for example:



Division of Military Retired Pay in Virginia

Divorce when one or both spouses are current or former members of the military can be quite a bit different than a civilian divorce. One of the main differences is the existence of a servicemember’s military retired pay. Issues such as the logistics of dividing the retired pay, the impact of disability pay, and survivor’s benefits must all be considered. The following are five issues that can arise in a military divorce.

Military Retired Pay in General and Divorce

Virginia courts have the ability to divide a military member’s “disposable retired pay” between the member and his or her spouse.  Courts in some other states do not have this ability, and courts in foreign countries do not have this ability, so where the divorce takes place can have a major impact on the division of military retired pay, which can often be a large asset.



Could Living With a Friend Cut Off Spousal Support?

In the recent case of Brennan v. Albertson, Sheila Brennan had her spousal support (also referred to as alimony) terminated when she was found by a Court to have been living with a partner in a relationship analogous to marriage for more than one year. What made the case unique was that Ms. Brennan’s partner was female — and there was no evidence that the two had any sort of romantic or sexual relationship.

In Virginia law, a typical spousal support award terminates upon one of the following things occurring:

1) the death of either party;

2) the remarriage of the recipient spouse; or

3) if it is proven that the recipient spouse has been habitually cohabiting with another person in a relationship analogous to marriage for one year or more.

While death and remarriage are pretty straightforward, cohabitation is often far less so.

Brennan met her friend, Lisa Baker, at an Alcoholics Anonymous meeting in 2006, around the time Brennan was going through divorce proceedings with her then-husband, Paul Albertson. Shortly after Brennan and her husband divorced, she purchased a large home with a significant amount of her own money, and Baker moved in with her. Baker paid the mortgage and utility bills. They ate meals together, watched each other’s children, attended extended family functions together, and contributed financially to each other’s children. However, they maintained separate bank accounts, car titles, and had no romantic or sexual relationship. They characterized their relationship as being very close friends, and “like sisters.”

No single factor can determine whether individuals are cohabiting in a relationship analogous to marriage. As a result, cases involving cohabitation are highly fact-specific, as was this case. After a thorough review of the evidence, the trial court terminated support, holding essentially that the financial and other support provided each party constituted a relationship analogous to marriage. The trial court was affirmed by the Court of Appeals.

What does this mean moving forward?

The Court of Appeals took great pains to paint the case at issue as one-of-a-kind, involving a rare set of circumstances that was not likely to be the basis for an explosion of other, similar cases. The Court also specifically exempted people living with family members as being eligible to have their support cut off, as a relationship between family members “differs intrinsically” from a relationship between unrelated persons. It remains to be seen whether this case will be a “one-hit wonder,” or whether it will have a larger impact across the domestic relations field in Virginia.

If you have questions about spousal support in Virginia, or whether cohabitation may be applicable to your situation, call the experienced Fairfax Family Law attorneys at Curran|Moher P.C. at (571) 328-5020.