Veteran’s post-divorce disability waiver affects former spouse

The case

An important case where considering a property division with a service member. The case is HOWELL v. HOWELL, certiorari to the supreme court of arizona, No. 15–1031. Argued March 20, 2017—Decided May 15, 2017.

The short answer

Service member and spouse divorced, then he retired and she began getting 50% of his retirement pay. 13 years later, the Air Force classified him as partially disabled. As required in receiving disability pay, he waived $250 per month. Retroactively, ex-spouse’s part was also reduced. SCOTUS says she’s stuck.

Planning point

Build in a contingency plan that compensates her if a post-divorce disability determination occurs.

Case report

The following is as reported from Legal Information Institute at Cornell Law School.

The Uniformed Services Former Spouses’ Protection Act authorizes States to treat veterans’ “disposable retired pay” as community property divisible upon divorce, 10 U. S. C. §1408, but expressly excludes from its definition of “disposable retired pay” amounts deducted from that pay “as a result of a waiver . . . required by law in order to receive” disability benefits, §1408(a)(4)(B). The divorce decree of petitioner John Howell and respondent Sandra Howell awarded Sandra 50% of John’s future Air Force retirement pay, which she began to receive when John retired the following year. About 13 years later, the Department of Veterans Affairs found that John was partially disabled due to an earlier service-related injury. To receive disability pay, federal law required John to give up an equivalent amount of retirement pay. 38 U. S. C. §5305. By his election, John waived about $250 of his retirement pay, which also reduced the value of Sandra’s 50% share. Sandra petitioned the Arizona family court to enforce the original divorce decree and restore the value of her share of John’s total retirement pay. The court held that the original divorce decree had given Sandra a vested interest in the prewaiver amount of John’s retirement pay and ordered John to ensure that she receive her full 50% without regard for the disability waiver. The Arizona Supreme Court affirmed, holding that federal law did not pre-empt the family court’s order.

Held: A state court may not order a veteran to indemnify a divorced spouse for the loss in the divorced spouse’s portion of the veteran’s retirement pay caused by the veteran’s waiver of retirement pay to receive service-related disability benefits. This Court’s decision in Mansell v. Mansell, 490 U. S. 581 , determines the outcome here. There, the Court held that federal law completely pre-empts the States from treating waived military retirement pay as divisible community property. Id., at 594–595. The Arizona Supreme Court attempted to distinguish Mansell by emphasizing the fact that the veteran’s waiver in that case took place before the divorce proceeding while the waiver here took place several years after the divorce. This temporal difference highlights only that John’s military pay at the time it came to Sandra was subject to a future contingency, meaning that the value of Sandra’s share of military retirement pay was possibly worth less at the time of the divorce. Nothing in this circumstance makes the Arizona courts’ reimbursement award to Sandra any the less an award of the portion of military pay that John waived in order to obtain disability benefits. That the Arizona courts referred to her interest in the waivable portion as having “vested” does not help: State courts cannot “vest” that which they lack the authority to give. Neither can the State avoid Mansell by describing the family court order as an order requiring John to “reimburse” or to “indemnify” Sandra, rather than an order dividing property, a semantic difference and nothing more. Regardless of their form, such orders displace the federal rule and stand as an obstacle to the accomplishment and execution of the purposes and objectives of Congress. Family courts remain free to take account of the contingency that some military retirement pay might be waived or take account of reductions in value when calculating or recalculating the need for spousal support. Here, however, the state courts made clear that the original divorce decree divided the whole of John’s military pay, and their decisions rested entirely upon the need to restore Sandra’s lost portion. Pp. 6–8.

238 Ariz. 407, 361 P. 3d 936, reversed and remanded.

Breyer, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Ginsburg, Alito, Sotomayor, andKagan, JJ., joined. Thomas, J., filed an opinion concurring in part and concurring in the judgment. Gorsuch, J., took no part in the consideration or decision of the case.