Military divorce finances have gotten complicated with all the USFSPA rules, RBCO requirements, and VA disability waiver interactions flying around. As someone who has seen families walk into this process with a civilian attorney who had never handled a military case and leave money on the table as a result, I learned exactly how military retirement assets get divided and where the mistakes happen. Today I will share it all with you.
How the Military Pension Gets Divided
Military retirement pay is marital property divisible in divorce. The Uniformed Services Former Spouses’ Protection Act authorizes state courts to divide military retired pay as part of a divorce settlement. Critically, USFSPA doesn’t mandate any specific split — it just gives states the authority to treat it as divisible marital property, and state courts apply their own equitable distribution or community property rules to determine the amount.
The most common outcome is a percentage or fixed dollar amount of the retirement pay, either based on the years of marriage overlapping with military service (the “coverture fraction”) or as a straight percentage of the total. The 10/10 rule is frequently misunderstood: it doesn’t determine whether a spouse can receive a share — it only determines whether payments can be made directly to the former spouse through DFAS.
The TSP in Divorce
The Thrift Savings Plan is also divisible in divorce, and it requires a Retirement Benefits Court Order — a specific document that DFAS and TSP must approve before any transfer occurs. A general property settlement isn’t sufficient. The RBCO must meet specific technical requirements, and TSP will reject documents that don’t conform. That’s what makes the RBCO process endearing to attorneys who specialize in military divorce — they’ve seen pro se couples lose their agreed split because the paperwork didn’t meet TSP’s format requirements.
If the parties agree that one spouse gets a larger share of real estate or other assets in exchange for keeping the TSP intact, that’s a legitimate negotiated outcome. But if TSP is being divided, the RBCO must be in place before the participant separates or retires.
VA Disability and What It Isn’t
VA disability compensation is not divisible in divorce. Courts cannot award a former spouse a share of VA disability pay directly. However, the interaction between VA disability and retired pay creates a complexity: under certain conditions, a retiree can waive a portion of retired pay to receive non-taxable VA disability compensation instead. When that waiver reduces DFAS-paid retired pay, it can effectively reduce what the former spouse receives. Courts have developed various approaches to address this, and the outcomes vary significantly by state.
SBP in Divorce
A divorce decree can require a former spouse to be named as an SBP beneficiary. The election must be made within one year of the divorce, or the former spouse loses USFSPA-based SBP eligibility permanently. I’m apparently someone who has seen former spouses lose SBP eligibility because the paperwork missed the one-year window by weeks. The timeline is not flexible once it closes.
Get a Military Divorce Attorney
Probably should have led with this, honestly: general family law attorneys frequently make errors in military divorce cases — not from incompetence, but from lack of familiarity with USFSPA, RBCO requirements, and VA disability waiver interactions. Military divorce is specialized enough that finding an attorney with specific experience in it is worth the effort, even if it means paying more or working with someone outside your immediate area.
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