23 Feb What Happens to VA Benefits in Divorce?
Since so many South Carolina divorces and child custody cases involve at least one spouse who is currently serving in the Armed Forces or who have previously served, military pensions, thrift savings plans, and VA disability benefits are quite frequently a topic of great concern. Fortunately, the law is pretty clear on how these types of assets and benefits will be handled in a divorce. When it comes to VA benefits, divorce, and other disability compensation benefits, South Carolina divorce lawyers can offer some reassurance.
Benefits as Property to Be Divided in Divorce
As a preliminary matter, the good news is that a veteran’s VA disability benefits are not considered the marital property to be divided in a divorce or separation. Under federal law at 10 U.S.C. 1408, VA disability compensation is considered exempt from assets used to calculate the division of assets.
Benefits Subject to Alimony or Child Support
While VA disability benefits are not subject to property division, they are considered part of the veteran’s income for the purpose of providing support to a spouse and children. While at first, this can be frustrating for those on a fixed income, it’s important to remember that the amount of VA disability benefits a veteran can receive is based, in part, on whether the veteran has a spouse or other dependents.
The amounts paid for those with ratings of 30 percent or more include additional amounts based on the number of dependents. Therefore, it’s only reasonable to conclude that VA benefits are intended to provide support, not only for the veteran but also for the veteran’s family.
The Supreme Court Has Spoken
When it comes to the typical VA benefits divorce situation, the Supreme Court’s 1987 decision in Rose v. Rose firmly established that each state has the authority to determine whether to use VA disability benefits in calculating support obligations. Almost all states have followed this line of reasoning, including South Carolina.
VA Disability Benefits or Military Pensions
In most situations, VA benefits cannot be garnished, even by state court order. Likewise, they can’t be divided as marital property. However, there are exceptions to this rule. For instance, some retired service members who also suffer from medical disabilities opt to receive VA compensation or disability retirement pay instead of their retirement pension. There are economic reasons for this decision, as disability retirement pay and VA benefits are tax-free, whereas traditional retirement pensions are taxable. So, unless there is a divorce, it’s usually a good choice to go with the non-taxed benefit. However, military pensions and disability retirement pay are subject to property division in a divorce, while VA disability compensation is not. It’s a fine line distinction, but it can be a costly one.
VA Disability and Divorce Lawyers in Mt. Pleasant
If you’re undergoing the separation process, understanding the entire VA benefits divorce situation is critical. The attorneys of Klok Law Firm LLC have experience helping veterans and their families through the most difficult aspects of life, whether fighting for disability benefits or helping you get through a challenging divorce. Contact us to get started today.