U.S. Supreme Court to review military divorce pay settlements

The U.S. Supreme Court has agreed to hear Marschner v. Marschner, a case concerning the enforceability of divorce settlements involving military retirement and disability pay. The dispute centers on whether private indemnification agreements can protect a former spouse's share of benefits if those benefits are later offset by non-divisible medical retirement or Veterans Affairs disability compensation.

Under the Uniformed Services Former Spouses Protection Act, time-based military retirement pay can be divided, but medical-based retirement and VA disability pay are protected and cannot be split. In this case, Roxane Marschner seeks to enforce a settlement clause in which her former husband, a North Dakota Army National Guard soldier, agreed to pay her the equivalent of her portion of retirement pay if disability compensation reduced his standard retirement benefits.

While a lower court ruled in favor of Marschner, the North Dakota Supreme Court later deemed the provision unenforceable. Marschner argues that federal law limits courts from dividing disability pay but does not prohibit private agreements between spouses to compensate for such losses.