Oregon Military Divorce Computes Marital Share with Highest Pay Grade

2013 Law Case: WILLIAM LEE MALPASS vs EMILY F. MALPASS – Court of Appeals

An Oregon military divorce case filed, February, 13, 2013 has ruled that the proper calculation of the marital share of the division of military income be based on the service member’s highest pay grade. This is a big win from the perspective of the military spouse and can set precedent for future USFSPA law cases, especially in Oregon.

Army Divorce Case: Malpass vs Malpass Information:

• Husband (service member) joined the Army in 1997
• Year of marriage: 2000
• Year of divorce: 2010
• Expectations at time of divorce: husband to serve another seven (7) years in the Army and then retire
• Original USFSPA ruling: division of military retired pay (marital property) was computed based on date of divorce

2013 Outcome:
Daniel Margolin of Stephens Margolin P.C., Portland, Oregon (representing the spouse) successfully argued that the highest pay grade should be used to calculate the marital share figure in the division of a military retirement income, regardless of the date of divorce.

Details:
The military spouse filed an objection to the military retirement pay division being calculated based on the day of marriage dissolution:

Wife objected, arguing that the pension should be divided in accordance with our opinion in Kiser and Kiser, 176 Or App 627, 32 P3d 244 (2001) (rejecting the husband’s suggestion that the trial court award the wife 50 percent of the monthly payout that he would receive if he retired at the date of dissolution and requiring, instead, that the court look to the value of the benefit at retirement).

In Kiser, the husband argued that “the trial court should award [the] wife 50 percent of the monthly payout he would receive if he retired at the date of dissolution.” 176 Or App at 631 (emphasis added). We rejected that approach, stating that, “when retirement benefits have not matured and are thus not presently liquid, it is equitable to look to the value of the benefit at retirement.”

Citing Kiser, we concluded that the court erred: “[U]nder Oregon law, the marital [share] portion of [the] husband’s pension must be calculated as a fraction of the entire actual pension, rather than as a fraction of a hypothetical pension amount.” source

The original decision was reversed and remanded that the marital share of husband’s military pension be computed as a fraction of the entire actual pension and adjust wife’s survivor benefits accordingly.

Equitable Divorce Solutions

The computation of marital share is a complicated issue. The book, Military Divorce Tips, discusses in detail the three options for computing the division of retirement pay in accordance to the requirements of the USFPSA and the logic usually presented when each choice is argued for computing marital share.

1. Use the rank on date of divorce,
2. Use the pay grade on date of retirement, or
3. Use a hypothetical formula (based on a hypothetical retirement date)

This 2013 ruling in the case of the Army service member Malpass vs Malpass will help set precedent for future cases. The issue concerns more than rank at retirement. There are some cases where service members try to finalize the decree prior to pinning on ceremonies in attempt to limit the amount received by the soon-to-be former spouse.

Survivor Benefit Plan (SBP):The ruling also awarded an equal adjustment to the Survivor Benefit Plan, ensuring that the former spouse would continue to receive the division of pay as an annuity should the service member pass away. Death is another area that former military spouses should discuss with their attorney prior to completion of the divorce decree.