A recent Nebraska Supreme Court decision, Wahl v. Wahl, provides important guidance for military families dividing retirement benefits in a Nebraska divorce. The case addresses whether a court can award a former spouse military Survivor Benefit Plan coverage only until the service member remarries.
The Nebraska Supreme Court concluded that it cannot. Under federal law, a court may require a service member to designate a former spouse as the Survivor Benefit Plan beneficiary, or it may leave the beneficiary designation to the service member. It cannot award former-spouse temporary coverage while allowing that coverage to end upon remarriage.
What Happened in Wahl?
When the parties divorced, they agreed that Leanne would receive 29.9% of Charles’ disposable military retirement pay. They could not agree about the Survivor Benefit Plan.
Leanne wanted to remain the SBP beneficiary. Charles wanted the ability to designate a future spouse if he remarried.
The district court ordered Charles to maintain Leanne as the beneficiary unless he remarried. If he remarried, he could remove Leanne and designate his new spouse instead. Leanne appealed.
Why Couldn’t the Court Award Survivor Benefits on a Temporary Basis?
A Survivor Benefit Plan, commonly called an SBP, provides continuing payments to a designated beneficiary after a retired service member dies. This can be important after divorce because a former spouse’s share of military retirement pay generally ends upon the service member’s death.
Federal law allows a divorce court to require a service member to designate a former spouse as the SBP beneficiary. The Nebraska Supreme Court explained, however, that a court cannot combine a former-spouse designation with a future-spouse designation.
The district court could require Charles to designate Leanne as the former-spouse beneficiary, or it could allow Charles to choose his future beneficiary. It could not do both.
The Nebraska Supreme Court therefore modified the divorce decree to remove the provision allowing Charles to replace Leanne upon remarriage.
Who Pays for the Survivor Benefit Plan?
The district court also required Leanne to reimburse Charles for the premiums associated with her SBP coverage.
The Nebraska Supreme Court upheld this part of the decision. Importantly, the parties had agreed that the district court could determine whether Leanne would be responsible for some or all of the premiums. The Court therefore concluded that the district court could require her to pay the cost.
What Does Wahl Mean for Nebraska Military Families?
Wahl illustrates why military retirement benefits require careful consideration in a Nebraska divorce.
Wahl makes clear that a court cannot structure former-spouse SBP coverage as a temporary benefit that ends if the service member remarries. Understanding these federal rules is important when negotiating or litigating military retirement benefits in a Nebraska divorce.
If military retirement benefits are part of your Nebraska divorce, the experienced family law attorneys at Koenig|Dunne can help you understand how those benefits may be divided and protected. Contact us today to schedule a consultation.
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