What Happens to Military Retirement in a Maryland Divorce?

What Is the “Marital Portion” of Military Retirement?

Courts typically use a coverture fraction to identify the marital share. If a service member served 20 years total and was married for 15 of those years, roughly 75% of the retired pay may be treated as marital property. The remaining portion, earned before or after the marriage, may be treated as separate property.

Maryland judges have discretion in how they apply this calculation, so the final number is rarely as straightforward as a simple ratio. Getting accurate service records, leave and earnings statements, and marriage documentation together early gives both parties a clearer starting point. Our Divorce Plan Checklist is a practical tool for organizing exactly those kinds of financial documents before your first attorney meeting.

Military retirement is just one piece of a larger asset picture. If you and your spouse have significant accumulated assets, our overview of asset division in Maryland divorce explains how courts approach the broader marital estate.

What Is the USFSPA and Why Does It Matter in a Maryland Military Divorce?

The Uniformed Services Former Spouses’ Protection Act, or USFSPA, is the federal law that gives state courts authority to divide military retired pay in the first place. Without it, federal preemption would prevent Maryland courts from treating a military pension as divisible marital property at all.

Key things Maryland spouses need to understand about the USFSPA:

• It does not require an equal split. It permits division, and Maryland’s equitable distribution principles determine the amount.
• It applies to both active-duty retirements and Reserve or National Guard pensions, though Guard and Reserve pensions use a points-based calculation rather than years of service.
• The court order must specifically invoke the USFSPA and describe the former spouse’s entitlement in terms that the Defense Finance and Accounting Service (DFAS) can administer.
• A Maryland court can only divide military retired pay if the service member is domiciled in Maryland, is a legal resident of Maryland, or consents to the court’s jurisdiction. This matters particularly when active-duty service members are stationed outside Maryland but their families live here.

What Is the 10/10 Rule in a Military Divorce?

The 10/10 rule is probably the most misunderstood concept in military divorce, and it comes up in nearly every case involving a long marriage and military service. Many people assume it determines whether a former spouse is entitled to any share of the retirement. It does not.

The 10/10 rule governs only whether DFAS will pay the former spouse directly.

To qualify for direct DFAS payment, two conditions must both be met:

1. The marriage lasted at least 10 years.
2. At least 10 of those married years overlapped with creditable military service.

When those conditions are met, the former spouse can apply to DFAS and receive their court-ordered share directly, without depending on the service member to pass the money along each month.

When the 10/10 threshold is not met, the former spouse can still receive a court-ordered share of retired pay. The difference is that the service member receives the full payment and is responsible for forwarding the former spouse’s portion. That arrangement requires precise enforcement language in the divorce order to be workable long-term.

The practical takeaway: not meeting the 10/10 rule does not mean the former spouse walks away without a share. It changes the payment mechanism, not the underlying entitlement.

What Is the 50% Cap on Disposable Retired Pay?

Federal law limits how much of a service member’s disposable retired pay DFAS can direct to a former spouse. That cap is 50% under most circumstances. It can increase to 65% when child support or alimony is also being collected through DFAS at the same time.

The critical word in that rule is “disposable.” Disposable retired pay is not the same as gross retired pay. It is calculated after specific deductions, and the most significant one is any amount waived so the service member can receive VA disability compensation instead. That distinction has real consequences, which the next section explains.

How Does Military Disability Pay Affect Divorce in Maryland?

This is the area where military divorce settlements most often run into problems, sometimes years after the original order was signed.

The VA Disability Offset Problem

When a service member waives a portion of military retired pay in order to receive VA disability compensation, which is tax-free, the waived amount is removed from disposable retired pay. Because a former spouse’s DFAS payment is based on disposable retired pay, a future increase in a disability rating can reduce what the former spouse receives, even if the original divorce decree said nothing about it.

This risk is not theoretical. It produces post-divorce litigation on a regular basis. Some settlement agreements address it through an indemnification clause, requiring the service member to make up any shortfall from other funds if a disability waiver reduces the former spouse’s share. Whether that approach fits a particular case depends on the full circumstances and requires careful legal drafting.

What Is CRSC and Can It Be Divided in a Maryland Divorce?

Combat-Related Special Compensation, or CRSC, is a separate federal benefit paid to veterans with combat-related disabilities. It is not part of disposable retired pay and cannot be assigned to a former spouse as divisible marital property.

In cases involving significant disability ratings, CRSC can replace a substantial portion of the retired pay that would otherwise be divisible. This needs to be understood and accounted for during negotiations.

One of the most common drafting errors we see is a court order that assigns a percentage of “all military retirement benefits” without explicitly excluding VA disability compensation and CRSC. That language creates enforcement disputes that can take years to resolve.

What Is the Survivor Benefit Plan and Why Does It Matter in Divorce?

The Survivor Benefit Plan, or SBP, is a Department of Defense annuity that continues a portion of retired pay to a named beneficiary after the service member dies. Without SBP coverage in place, a former spouse’s court-ordered share of retired pay ends the day the service member passes away. For a former spouse who relied on that income for financial stability, that outcome can be severe.

What Maryland spouses need to know about SBP in a divorce:

• A service member can elect to designate a former spouse as the SBP beneficiary.
• Under the USFSPA, a court can order SBP coverage for a former spouse directly in the divorce decree.
• A former spouse can also independently request SBP coverage within one year of the divorce decree becoming final.
• SBP premiums are deducted from the service member’s retired pay, reducing the net monthly amount. This should be factored into the financial terms of any settlement.
• The SBP benefit is calculated as a percentage of the base amount covered, not the full gross retired pay.

The one-year election window is a firm deadline. If neither party addresses SBP in the decree, and the former spouse does not independently request it within that window, the opportunity for coverage can be lost permanently. This is not a gap that can typically be corrected after the fact.

If you are unsure whether your existing agreement addresses SBP, speaking with an attorney sooner rather than later matters. You can learn more about our legal team on our attorneys page or reach us directly through our consultation booking page.

Who Qualifies for TRICARE After a Military Divorce? The 20/20/20 Rule Explained

Healthcare coverage is often as financially significant as the pension itself, and the rules around TRICARE eligibility after a military divorce are precise.

To qualify for continued TRICARE coverage as a former spouse, all three of the following must be true:

1. The service member completed at least 20 years of creditable military service.
2. The marriage lasted at least 20 years.
3. At least 20 of those married years overlap with the service member’s creditable military service.

A former spouse who meets all three conditions qualifies as a 20/20/20 former spouse and retains full TRICARE coverage indefinitely, as long as they do not remarry and are not covered by an employer-sponsored health plan.

If the overlap is 15 to 19 years: The former spouse may qualify for a transitional period of TRICARE coverage after the divorce. This coverage is not indefinite.

If the overlap is under 15 years: There is no TRICARE entitlement. Alternative health coverage, whether through COBRA continuation coverage or accounted for in spousal support negotiations, should be addressed in the divorce settlement. For context on how courts approach spousal support in Maryland, our spousal support overview explains the general framework.

One important practical point: even former spouses who fully qualify for TRICARE do not receive it automatically. The former spouse must apply for a Defense Enrollment Eligibility Reporting System (DEERS) identification card within a specific window after the divorce is finalized. Missing that enrollment step can interrupt coverage even when the entitlement exists.

How Is the Thrift Savings Plan Divided in a Maryland Divorce?

The Thrift Savings Plan, or TSP, is the federal government’s version of a 401(k). It is a completely separate asset from military retired pay, and it has its own distinct division process. Many service members have both a pension and a TSP account. Each must be addressed individually in the divorce, and they cannot be treated as interchangeable.

What Is an RBCO and How Does It Differ from a QDRO?

TSP accounts are divided through a Retirement Benefits Court Order, known as an RBCO. This is not the same as a Qualified Domestic Relations Order (QDRO), which is used for private-sector retirement plans. Using a standard QDRO for a TSP account will result in the order being rejected.

The RBCO must comply with TSP-specific federal regulations, which have different technical requirements than a typical private-sector retirement order. When accepted, the former spouse receives their share either in a separate TSP account or as a lump-sum distribution. If a lump-sum distribution is not rolled over into a qualified retirement account, it may be subject to taxes and early withdrawal penalties.

TSP contributions made before the marriage or after the separation date are typically treated as non-marital property, which makes accurate dates and historical account statements essential for calculating the marital share correctly.

Using a generic QDRO template for a TSP is one of the most common and avoidable errors in military divorce. A rejected RBCO delays the former spouse’s ability to receive their share and requires additional attorney time and court involvement to correct.

Common Mistakes in Maryland Military Divorce Cases

Military divorce involves overlapping layers of federal and state rules that interact in ways civilian divorce does not. These are the mistakes that come up most often and tend to cost people the most:

Treating the 10/10 rule as an entitlement rule. The right to a share of retired pay exists regardless of whether the 10/10 threshold is met. The rule only governs whether DFAS pays the former spouse directly.

Failing to carve out VA disability compensation and CRSC. An order that assigns a percentage of “all retirement benefits” without specific exclusions can produce unintended results when disability ratings change post-divorce.

Missing the SBP election window. The one-year deadline is strict and rarely extended. Missing it can permanently eliminate lifetime coverage for the former spouse.

Using a QDRO for a TSP account. The TSP requires an RBCO under a different set of federal rules. A QDRO will be rejected.

Not accounting for the disposable pay offset. Future decisions a service member makes about VA benefits can significantly reduce a former spouse’s share, sometimes years after the divorce.

Skipping DEERS enrollment. Even eligible 20/20/20 former spouses can lose TRICARE coverage if they miss the post-divorce enrollment deadline.

Overlooking Reserve and Guard pensions. These pensions use a points-based calculation and typically do not begin paying until the service member reaches retirement age. That difference in timing affects how the asset should be valued and negotiated.

Treating the TSP and the pension as one asset. They are separate assets with separate legal mechanisms. Each needs its own properly drafted order.

For high-earning spouses or service members with complex financial portfolios, these issues intersect with broader asset division concerns. Our Maryland high-asset divorce page and our resources for high-earning professionals address some of those additional considerations.

Planning a Maryland Military Divorce Carefully

Military retirement benefits represent years of real service and financial sacrifice. The pension, the TSP, the Survivor Benefit Plan, and TRICARE eligibility are all meaningful assets, and getting the division right requires both a clear understanding of federal law and the ability to translate that into court orders the military’s benefits systems will actually honor.

At Divorce With A Plan, we work through these details methodically, because an order that looks correct on paper but fails at DFAS or the TSP record keeper does not protect anyone. If you are a service member or military spouse in Maryland and want to understand what your financial picture could realistically look like, we welcome you to schedule a consultation with our team.

FREQUENTLY ASKED QUESTIONS

This article is for general informational purposes only and does not constitute legal advice. Maryland law changes frequently, and every situation is unique. The information provided here does not substitute for advice about your specific circumstances. Consult a qualified Maryland family law attorney for guidance about your situation. Past results in similar matters do not guarantee future outcomes.