Divorce after a long-term marriage can be especially difficult. Families, finances, housing, and emotions have likely become well enmeshed after twenty or more years of marriage. The procedure to end a long-term marriage is the same as the procedure to end a short or medium-term marriage, but there are certain issues that become especially important in long-term marriages.
Qualified Domestic Relations Orders (QDROs) enable distributions to be made from retirement plans such as defined benefit or pension plans, defined contribution plans, individual retirement plans (IRAs), annuity plans, etc. to the spouse or former spouses of the plan owner provided that such orders are qualified. The spouse or former spouse is known as the "alternate payee" and has the right to receive a portion or the entire benefit payable to the spouse who is actual owner of the retirement plan. The owner of the retirement plan is known as the "participant".
You can save money for Col Smith in several ways in negotiations over his pension. The first one to use a set dollar amount in specifying the pension share for his wife upon divorce. This means that the spousal entitlement is calculated (usually with 50% of the marital share as the model) and then converted in today's dollars to a specific monetary amount, such as: "Mrs. Smith shall receive $495 a month from the disposable retired pay of Col Smith." This method of dividing the pension, if accepted by the other side, means that all future increases in Col Smith's pay belong to him and, upon retirement, the cost-of-living adjustments (COLAs) which are applied to retired pay go solely to him. She receives none of these benefits. The COLA, when applied solely to Col Smith's pension, will roughly double its value over twenty years.
In a military divorce case, the nonmilitary spouse will often be concerned about pension share payments and taxes. She will invariably want to receive pension division payments direct from the retired pay center.