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Military disability benefit payments and divorce entitlements

Following a divorce in Indiana, certain marital assets are usually split. However, asset division is slightly different for soon-to-be exes of military veterans, especially when disability benefits are involved. There have been recent revisions in how a service member's retirement pay is handled during a divorce, but disability benefit pay division is handled differently.

Under certain conditions, a veteran must waive their retirement payments in order to become eligible for disability benefits. This calculation is also based on the number of dependents a veteran has. Waving retirement benefits can also affect a spouse during a military divorce since disability benefits of this nature aren't divisible in the event of a split. Because of this unique characteristic, some military veterans opt to waive retirement benefits for added protection. Plus, disability benefits are also tax exempt.

What this means when a divorce occurs is that disability benefits aren't counted as an asset, according to federal law. However, these benefits will be considered if there is a need to calculate a veteran's income to determine the amount of spousal support or child support payments. The justification for this is because dependents are considered when benefits are calculated, so part of a veteran's payments would likely go toward dependent children. Therefore, some custodial parents believe it's fair to receive some of these payments to help them their raise children.

One way to minimize issues that may arise during a military divorce is for a veteran and their spouse to work with an attorney to prepare an agreement prior to marriage. Such an agreement could be drafted so that a veteran agrees to a pay a monthly amount to a spouse in the event of a divorce. If this step is taken, a spouse would still be protected financially even if the veteran opts to forego retirement benefits for disability benefits. Otherwise, a veteran's spouse would have to work with a lawyer to attempt to receive a fair share of available assets.

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