Some FAQs About The BRS And Your Florida Divorce

Beginning January 1, 2018, the U.S. military dramatically changed its retirement system. Instead of a basic defined benefit plan, the new Blended Retirement System has the features of both a pension plan and a 401(k)-type defined contribution plan. Furthermore, after just twelve years of service, servicemembers become eligible for continuation pay. This one-time bonus could be quite substantial.

The big tradeoff is that the pension portion of the military retirement plan will no longer be as large. Furthermore, military retirement is much more vulnerable to market forces.

The Clearwater area has a lot of military retirees. Some were stationed here and some retired here. Based on the answers to the questions below, it might be a good idea to modify your existing divorce decree or other property division documents.

Can the QDRO Distribute Continuation Pay?

Technically speaking, probably not. A Qualified Domestic Relations Order can only divide a retirement account. Traditionally, that means a defined benefit plan (pension) or a defined contribution plan (IRA). Arguably, a bonus payment is not part of this traditional retirement package. It remains to be seen how Clearwater courts will interpret the BRS.

In the interim, it may be a good idea to include detailed division provisions in the divorce decree. These provisions will be enforceable regardless of the QDRO’s legal fate. The major drawback is that the obligee spouse may have to pay taxes on the disbursement. However, most of something is better than all of nothing. So, as a stopgap, that’s the best a Clearwater divorce attorney can do at this point.

What Happens If My Ex-Spouse Opts-in to the BRS?

If that’s the case, the property division clearly needs to be modified. A BRS conversion certainly qualifies as a material change of circumstances that was unanticipated at the time the last order was entered.

But the change may not just be a matter of crunching numbers. Many times, a divorce property division is a very delicate balance. For example, some obligees give up property interests in exchange for an additional alimony income stream. If that’s the case, the entire property division may need to be revisited. At this point, you definitely need a highly-experienced attorney to protect your legal and financial rights, especially in cases where one is seeking a modification.

Is Continuation Pay Marital Property in Clearwater?

Maybe. On the one hand, it is part of the retirement package, and retirement pay is clearly marital property that’s 100 percent divisible. Yet on the other hand, the retiring party arguably earned the money after the marriage ended. That interpretation would make it separate property.

Apropos of nothing, former President Harry Truman supposedly once wished for a one-handed economist. That way, he surmised, they could not say “on the one hand” and “on the other hand.”

Can a Florida Judge Block an Opt-In Decision?

Absolutely. Until the issues surrounding divorce and the BRS are resolved, a temporary restraining order or injunction may be the best course of action. At the very least, a restraining order allows the court to gather more facts before making a decision.

Count on Experienced Lawyers

The new military retirement system may have a dramatic impact on your divorce. For a consultation with an experienced family law attorney in Clearwater, contact Cairns Law, P.A. Convenient payment plans are available.

Resource:

militarypay.defense.gov/BlendedRetirement/