MN court: Ex-spouses not entitled to share of military pay

The Minnesota Court of Appeals said Monday that a spouse is not entitled to a share of military disability benefits, even if the two agree to it in their divorce settlement.

The three-judge panel ruled in the case of Diana Berberich and Mark Mattson, who divorced in February 2015 after 13 years of marriage.

In their divorce settlement, she was to receive 40 percent of his retired military pay and disability benefits. At the time of the divorce, Berberich was working part time after spending the majority of her married life as a homemaker and care provider for their children.

When Mattson failed to make regular spousal maintenance payments, she sued to enforce the original settlement and a court ordered him to turn over a portion of his benefits.

The Minnesota Court of Appeals ruled that while retired pay may be treated as community property in calculating divorce settlements, disability payments are off limits.

It did so because two days before this case was argued before the Minnesota Court of Appeals, the U.S. Supreme Court made a significant ruling in a similar case, reversing a lower court ruling.

The Court held that “[a] state court may not order a veteran to indemnify a divorced spouse for the loss in the divorced spouse’s portion of the veteran’s retirement pay caused by the veteran’s waiver of retirement pay to receive service-related disability benefits.”

The Court rejected the argument that the former spouse’s right to the veteran’s benefits had vested, noting that state courts “cannot ‘vest’ that which they lack the authority to give.”

Berberich had argued that she should be entitled to an amount equal to the amount of disability compensation her ex-spouse received because, “once the disability-compensation funds reach Mattson’s pocket, they have become his property and are no longer subject to federal protection.”

But that runs afoul of federal law, the state court said, acknowledging that while it creates a “difficult situation” for divorcing couple, divorce courts are not allowed to “address possible inequities on a case-by-case basis.”