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Landmark case hurts ex-military spouses receiving retirement

Divorces have the potential to be complicated, especially when benefits like retirement become involved. Many factors play into how much money a spouse may be paid out in a settlement, and there are sometimes ways that a person could reduce that payment later, even though it was ordered by the court at one time.

For example, take this case in which a woman was receiving a portion of her ex-spouse's retirement benefits. She had received them for many years when they suddenly reduced. She discovered that her ex-husband had taken disability, and he waived part of his income to get it tax-free. That waiver reduced how much retirement income he earned from the military, and the amount she was paid each month also dropped.

She went to court to seek the missing money from her ex-spouse. There, the court determined that she could not, because military retiree disability payments could not be split with ex-spouses.

Why should this case matter to you? If you are looking into long-term payments from your spouse's retirement income, this is one kind of loophole he or she could use to cut down how much you're paid. It's important to review this landmark decision, because your financial stability could be completely altered if your ex-spouse decides to waive his or her retirement income in exchange for tax-free benefits.

Your attorney will talk to you more about how this could affect your case and what you can do to protect yourself and your finances in the future. This makes changes to how you need to create a contract so you can protect yourself.

Source: Daily Press, "High court: States can't divide military retiree disability pay with ex-spouses," Tom Philpott, June 04, 2017

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