Military divorce in Nevada involves a specialized set of federal statutes that govern how military retirement pay, VA disability compensation, and survivor benefit plan elections are treated — often in ways that directly conflict with state community property rules. Understanding the interplay between federal law and Nevada community property law is essential for military families navigating divorce.
Military Retirement Pay Under USFSPA
The Uniformed Services Former Spouses’ Protection Act (USFSPA), codified at 10 U.S.C. § 1408, authorizes state courts to divide military retired pay as community property in divorce proceedings. Nevada courts routinely apply the time-rule formula: the fraction of the service member’s retirement attributable to the marriage equals the number of months of creditable military service during the marriage divided by the total months of creditable military service at retirement. The resulting fraction is the community’s share of the retirement benefit, and each spouse receives half of that fraction — meaning the non-military spouse receives one-half of the community fraction. Direct payment to the former spouse from the Defense Finance and Accounting Service (DFAS) requires the marriage to have overlapped with military service for at least 10 years (the 10/10 rule) — but the court can still divide the retirement in shorter marriages, with the military spouse making direct payments to the former spouse from their own accounts rather than through DFAS.
VA Disability Compensation: Howell v. Howell
VA disability compensation is protected from division as separate property under 38 U.S.C. § 5301. The critical issue arises when a service member waives a portion of their military retirement to receive tax-free VA disability compensation — a common practice because VA compensation is tax-exempt while retirement pay is not. Prior to the Supreme Court’s 2017 decision in Howell v. Howell, 581 U.S. 232, some state courts ordered service members to indemnify their former spouse when disability waivers reduced the retirement pay stream. Howell squarely held that states cannot order a veteran to indemnify an ex-spouse for reductions in retirement pay caused by disability waivers after divorce. Nevada courts must comply with Howell — if the service member later waives retirement pay for VA disability compensation, the former spouse’s retirement benefit will be reduced and there is no judicial remedy. This risk must be factored into settlement negotiations involving military retirement.
Survivor Benefit Plan Election
The Survivor Benefit Plan (SBP) provides ongoing payments to a designated beneficiary after the service member’s death. Upon divorce, the SBP designation can be awarded to the former spouse by court order — but the election must be made within one year of the divorce decree. If the court orders SBP coverage for the former spouse but the election is not timely filed with DFAS, the coverage lapses and cannot be reinstated. This deadline is absolute and has no exceptions. In every military divorce involving retirement pay division, the divorce decree must clearly address SBP election, and both parties or their counsel must ensure the DFAS filing is made within one year. The SBP premium (currently 6.5% of the base retirement amount covered) is typically addressed in the decree — either deducted before the retirement division payment or assigned to one party.
Contact Hauser Family Law
Hauser Family Law handles Nevada military divorce cases including USFSPA retirement division, VA disability issues, and Survivor Benefit Plan elections. Contact us for a consultation.