For a long time, I thought the ten year myth – the idea that you had to be married for ten years to be entitled to a portion of the military retirement – was limited to military divorces only.
Please note, of course, that I called it a MYTH.
I didn’t realize that many civilians had this same belief, too. So, anyway, here I am, today, to dispel this myth for you. In Virginia, at least, there is no requirement that you must be married for ten years, whether military or civilian, in order to have an interest in the retirement accounts you or he invested in during the course of your marriage.
Under Virginia law, whether you are military or civilian, you have an interest in half of what was earned, purchased, or acquired during the marriage, and that includes retirement accounts.
What do you mean by retirement accounts?
When I’m talking about retirement accounts, I’m talking about investment accounts in which you (or he) contributed during the course of your marriage, whether these are pension or stock option plans, 401(k)s, 403(b)s, IRAs, or other wealth-building mechanisms.
How do I know if the account is marital?
In Virginia, we categorize property as either separate, marital, or hybrid, but it really all comes down to where the money originated from. If you or he earned it during your marriage, it’s marital.
If you didn’t earn it – like, it came from a trust fund, an inheritance, a gift, a personal injury award, or some other source outside of the efforts generated by either of you – then it’s likely separate, even if it came to one or the other of you during the marriage. Likewise, anything that you contributed to prior to the marriage or after the date of separation is likely your separate property as well.
But, if you or he earned it and invested it during the marriage, you have an interest in it at the point of separation and/or divorce.
What if we haven’t been married ten years?
If you haven’t been married ten years, then your interest may be small-ish. Right? The way these accounts work, the amount starts to grow because of the benefits of compounding interest.
You only have an interest in what was earned during the marriage (and appreciated value from those contributions), but if your soon-to-be ex goes on to work for many, many more years, or to contribute more post-divorce, or had already contributed a lot before you were married, well, your interest may be correspondingly somewhat small.
In the case of a pension, if you were only married for 5 or 6 years out of a 30 year career, well, your interest is relatively small, too. But that doesn’t mean it doesn’t exist.
It’s possible that it’s small enough – or that your accounts in your own name are worth enough – that you might waive your interest in these things, but a (good) attorney will never tell you to do that without at least encouraging you to try to figure out what your interest is worth.
So, why does this ten year myth exist?
Well, there is good reason for the ten year myth. In the military, if you haven’t been married for ten years, then you don’t qualify for direct pay from DFAS. That means that, once your ex husband retires, you won’t receive your portion of the retirement directly from DFAS; your husband will receive his portion and then he’ll forward yours on to you. It’s a bit of an annoyance but the most important takeaway here is that this doesn’t mean you don’t have an interest. You do.
There’s also social security, which does require that you be married for ten years before you have the option to elect to receive your portion of his benefit. For a number of Americans, this is the only “retirement” they’ll have, so I can understand the confusion. Social security, though, is a federal program and it is federally regulated. It’s not something that we handle or divide in divorce. In fact, if you opt to receive your portion of his benefit – as opposed to your own – it doesn’t cost him anything. It doesn’t change his social security benefit.
It’s not something that we have to divide in divorce. In fact, it doesn’t really come up in divorce at all. In our separation agreements, we just have a general clause that says something like that nothing in the agreement is intended to modify any entitlement that either spouse has under social security. That’s it.
For these purposes, social security isn’t really retirement – or, at least, it’s not a private, individual retirement account that is divisible in divorce. So, although for social security purposes you must be married for this period to qualify to receive those benefits, there is no such qualification required in order to receive your portion of the retirement accounts – pensions, 401(k)s, IRAs, etc – that were invested in during the marriage.
It’s really these two things – the direct pay bit and the social security bit – that leaves people confused. But it is important to know that you are entitled to the retirement that was earned during the marriage, as well as any increase in value during that time, as part of your divorce.
For more information, to learn more about Virginia divorce, or to schedule a consultation, give our office a call at 757-425-5200.