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over the past decade have been blindsided by a law
E BaNK (B. MITCHELL)
Prder in the court! Eleven years after its inception, the Uniformed Services Former Spouses Protection Act needs to have some °f its glaring inequities corrected, one of the *n°st obvious being the treatment of military retired pay as property that can be divided in advance.
Staff Sergeant James J. LoCorto served in combat with the Marine Corps during Desert Storm. Upon re. turning to his duty station at Twentynine Palms, Cal- 1 °mia, with plans to retire after 20 years of honorable Hiilitary service, he found his wife of 19 years cohabitat- with another man. In May 1991 she abandoned Lo- 0rto and their three children and filed for a no-fault di- jorce in California. The divorce became final in January 92, and she received half the property of the marriage P Us 47.5% per month of LoCorto’s military retirement Pay. Payments will continue until his death or hers, even 1 she remarries.
LoCorto and tens of thousands of other military veter
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at their military leadership neglected to tell them about. /. ® Uniformed Services Former Spouses Protection Act SFspa) was enacted by Congress in September 1982 tIlh an effective date of J February 1983), ostensibly ^ Protect deserving, divorced spouses of military mem- thrS’ '3Ut Las too often victimized military retirees and eir current families. The USFSPA strips military veters of their constitutional right to equal protection under ne law.
i.pri°r to the USFSPA the states had no federal authors' to dismember any part of the military compensation SDStem. The USFSPA now cedes to the states the ream ns'L'Lty of the federal government for determining the fill°Unt Pay retired military members receive for ful- ln§ their obligations to the federal government. Conversely, the USFSPA inserts the federal government into a legal process—divorce—historically reserved for the states.
On 26 June 1981, the U.S. Supreme Court ruled, in McCarty v. McCarty, that “the military retirement system confers no entitlement to retired pay upon retired member’s spouses and does not embody even a limited community property concept.” The court further opined that “the application of community property principles to military retired pay threatens grave harm to clear and substantial Federal interests.” The McCarty court recognized, however, that the situation of an ex-spouse of a retired military member could sometimes be a serious one, possibly resulting in destitution or some other unfair predicament, and invited Congress to legislatively review the situation. Congress attempted to do this by inserting the USFSPA as a rider to the Defense Authorization Act for fiscal year 1983.
The USFSPA circumvented—but did not supersede— the McCarty ruling by providing that “ a [state] court may treat disposable retired pay payable to a [military] member for pay periods beginning after June 25, 1981, either as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction of such court.”
The most common public misconception of military retired pay is that it is a pension and, therefore, property that can be divided. However, federal statutes and case law have historically and consistently regarded military retired pay as reduced compensation for reduced services, with no attributes of a pension. The Comptroller General, the Department of Defense, the Internal Revenue Service, and U.S. bankruptcy courts have also taken this position. A serious and, possibly, litigious anomaly exists in that military members and their ex-spouses are required to pay federal and state income taxes on pay legally reclassified, by the USFSPA, as property.
Cause and Effect
Although it was not the intent of Congress that the US- FSPA be applied retroactively, thousands of divorces finalized prior to 1 February 1983 were reopened. This imposed severe hardships on the affected military retirees and their second families who were suddenly faced with unexpected requirements for commencing USFSPA payments as well as payments of substantial arrearages. Congressional intent vis-a-vis retroactive applications was not codified into law until November 1990. Even then, the amendment applied only to divorces prior to McCarty and required the continuation of payments for two more years: until 5 November 1992. This requirement was unreasonable and discriminatory because it provided no relief for military members divorced between McCarty (26 June 1981) and the effective date of the USFSPA and because military retirees were given no comparable adjustment period when the USFSPA was originally enacted.
In addition, the USFSPA had no grandfather clause; this deficiency changed the military retirement compensation system retroactively. Military members already retired, or eligible for retirement, were caught off guard by a law that they had no reason to anticipate. The failure to grandfather denied equal protection under the law to divorced military veterans, whose lives in retirement were devastated without prior notice and without compensatory relief. The USFSPA does, in fact, constitute an “unjust taking” in violation of rights provided by the Fifth Amendment to the U.S. Constitution.
The most invidious aspect of the USFSPA is that the reclassification of pay as property permits payments to the benefiting ex-spouse for life—whether or not he/she remarries. This is inconsistent—both with the traditional treatment of alimony in the application of domestic relations law and with:
> The former-spouse programs for the U.S. Foreign Service and the Central Intelligence Agency
► DoD’s Serviceman’s Benefit Program (SBP)
> DoD’s widows’ pension benefit program
► That section of the USFSPA itself that deals with government payments of retirement pay to abused military dependents
All of these programs provide for the termination of payments upon remarriage of the beneficiary. The abused- military-dependents provisions of the USFSPA are discriminatory because government payments stop when the ex-spouse remarries, but payments by ordinary citizens (military retirees), specified elsewhere in the USFSPA, do not.
The law contains another inconsistency. The military veteran making USFSPA payments is subject to recall to active duty, continuing compliance with the Uniform Code of Military Justice and constraints on employment, travel, etc. Yet, the ex-spouse, drawing from the same retirement pay, has no obligations to the government.
The USFSPA’s implementation in the states has been contradictory and confusing—often contrary to the intent of Congress, the U.S. Supreme Court, and the USFSPA itself. The USFSPA’s stipulation that a court “way treat the disposable retired pay. . . .” has emerged, in practice as shall. Moreover, courts frequently make contempora neous awards of military retirement pay, alimony, chil support, and other assets of the marriage. In addition, a ex-spouse may be eligible for social security benefits de riving from the military member’s entitlement. Part of th pre-USFSPA lore was that some needy military spouse had no protection whatsoever. The facts are that milita spouses always have had the same full range of remedie in divorce court as any other spouses in America. In addition, military spouses have long enjoyed the power of garnishment of a military member’s pay. Congress could have resolved the dilemma of the U.S. Supreme Court’s “McCarty fence” around military retired pay simply by enacting legislation that would have rendered it a source g of alimony in a divorce proceeding, but as pay, not property. Most members of Congress probably were oblivious to the “payments until death” implications of reclassifying pay as property. There are additional hidden time bombs in the USFSPA:
► The USFSPA permits an ex-spouse to receive “windfall benefits,” meaning that retirement payments may be based on the rate of pay extant at the time of retiremen1 of the military member, not at the time of divorce. This happens frequently when divorce occurs during active duty and USFSPA payments do not commence until retirement As a result, the ex-spouse receives benefits based on inservice advancements for which they cannot conceivably claim any credit.
>• The USFSPA does not stipulate any limits on the tim| permitted for an ex-spouse to enter a claim for payment5! Consequently, the divorced military member can bfl doomed to a life in retirement waiting for “the othd| shoe to drop.”
► The USFSPA provides that disability pay being receive under Chapter 61 of USC 10 1201 et seq. is not to be inj eluded in the calculation of “disposable pay.” This decision was reinforced in 1989 by the U.S. Supreme Court'1 ruling in Mansel v. Mansel. Despite this, divorce court1 frequently include disability pay in the calculation of di* posable pay under the USFSPA. Since USFSPA victim1 usually do not have the financial resources required f seek remedies for this in the courts, further legislative relief is required to ensure equal protection under the In'*
Although the USFSPA manifestly applies only to nijjj itary retirement pay, decisions of divorce courts since 19$ clearly indicate the need for further protection of activ£ duty military personnel to prevent:
>■ Involuntary, court-ordered retirements in order to coi'1 mence USFSPA payments
► Distributions of active-duty pay pursuant to court ders under the USFSPA
► USFSPA payments after recall of retired military mem bers to active duty
Despite the fact that many military members alread.' have been impacted by the USFSPA, DoD does not bds its personnel on the law.
Finally, although the USFSPA’s congressional spons0 claims that the law applies equally to both male and fj male military members, the only pronoun appearing in m|
law itself is “his.” This may partially explain why the prestigious Defense Advisory Council on Women in the Service (DACOWITS) has steadfastly maintained that the USFSPA is of no consequence to women in the service and is, therefore, not on the DACOWITS agenda.
Restoring Fairness to the Military Divorce Process
Most people would agree that both members of a military marriage that ends in divorce should be treated fairly and equitably by the courts. Even in this era of no-fault divorces, there is no legal prohibition against basing divorce settlements on merit, need, and ability to pay. Unfortunately, a review of court experience with the USFSPA since 1982 shows that it has operated in theory as an option, but has operated in practice as a mandate.
An overwhelming majority of the national community of military veterans organizations, with an aggregate membership of more than 10,000,000, supports reform of the USFSPA to resolve its inequities. Some (e.g., the American Legion) even advocate its repeal. After 11 years, the egregious impact of the USFSPA finally is in plain view. Moreover, the status of the military spouse of the early 1980s has undergone evolutionary social, economic, and cultural changes, which have moderated the climate in which the USFSPA was conceived.
Considering the recorded reluctance of Congress to repeal any legislation, once enacted, repeal of this law is an unlikely alternative. Moreover, attempts to repeal would not only raise the political ire of the USFSPA voting bloc but would again raise all the questions that followed the McCarty decision regarding treatment of military retirement pay in divorce proceedings. Most fair-minded peo- pie would agree that under certain circumstances some equitable division of military retirement pay can and should be made. One extreme case would be if retirement pay was the only existing asset of a military marriage ending in divorce. Therefore, reform of the USFSPA to resolve its manifested inequities is a more reasonably attainable goal.
The leading proponent of reform is the American Retirees Association (ARA), a California-based nonprofit organization of active-duty, reserve, and retired military members, both male and female. The ARA was formed in 1984 for the exclusive purpose of curing the inequities in the USFSPA. This single-minded objective is pursued closely with the other military veterans’ organizations whose broader agendas include USFSPA reform or repeal. These groups agree that the following would go far toward restoring fairness and equity to the military divorce process:
> Terminate USFSPA payments upon the remarriage of the benefiting ex-spouse, while ending current payments to remarried former spouses not more than 180 days from the date of enactment of the amendment. This provision could be softened by providing that it would not appl! to ex-spouses who had remarried but were subsequent!,’ widowed or divorced and are currently unmarried.
► Restrict awards under the USFSPA to correspond to t' military retiree’s length of service and pay grade at tli time of divorce, not at the time of retirement. USFSP payments would, however, be adjusted to existing scales at the time of retirement.
► Establish a statute of limitations giving former spous two years from the date of a final divorce to seek a di sion of military retirement pay under the USFSPA.
► Reinforce the provision of the USFSPA that precludes th inclusion of disability pay in the calculation of disposal
pay. Consider, however, includil disability pay wherever military iL tired pay is the only asset of th] marriage.
>■ Provide specific wording to pr°l tect active-duty military person nel by precluding: involuntaf) court-ordered retirements in om to commence USFSPA payment distribution of active duty pa' pursuant to court orders under thj USFSPA; and USFSPA paymen
______________ __ after recall of retired militaq
members to active duty.
► Preclude retroactive application of the USFSPA for 3flj divorce finalized prior to 1 February 1983. Public u\ 101-510 of 5 November 1990 prohibits retroactive op^1] ing of divorces finalized on and before 25 June 198F one day before the U.S. Supreme Court’s McCarty ded sion. This denies relief for those divorced during the gJ' between McCarty and the effective date of the USFSP^ The failure to grandfather the USFSPA was a manifest i" justice to military people who had served honora^ prior to 1 February 1983 and were peremptorily deprive of their matured right to full retirement pay.
► Require the leadership of the uniformed services to br'1 their personnel on the existence and significance of $ USFSPA.
Honorable military veterans have never subscribed11 the theory of the “throwaway wife” vociferously poused by feminist interests during the time the SPA was being considered by Congress. Neither do tM conform to the stereotypical military member then repff sented as a quintessential, devil-may-care, madcap pi?!, boy who roams the earth seeking adulterous relations!11!"' while leaving at home a faithful wife and children can be abandoned at will. The law, as it stands, is festly unfair. Somehow, military veterans must convi^ their 1990s contemporaries that they are not looking (l a win in divorce court—just a tie.
Captain Ault is currently the Executive Director of the American L
tirees Association. He was a naval aviator and commanded the v Coral Sea (CV-43)