Military Divorce: Can a Settlement Protect Your Pension Share?

When a marriage to a service member ends, the military pension is often one of the biggest assets on the table. On October 1, 2026, the U.S. Supreme Court agreed to hear Marschner v. Marschner, a case about whether the promises spouses write into a settlement to protect that pension can be enforced.

The question is narrow, but it reaches a lot of South Mississippi families. If a veteran promises in a divorce settlement to make up the difference when disability pay shrinks a former spouse's share of military retirement, can a state court hold the veteran to that promise?

The Story Behind the Case

Richard Marschner joined the North Dakota Army National Guard in 1985 and married Roxane in 1994. When they divorced in 2016, Roxane was to receive a share of Richard's Guard pension and his federal civilian retirement once he retired, and the rest of the settlement was built around that expectation. Richard received $50,500 from Roxane's 403(b) account, Roxane paid him $90,000, and both gave up spousal support.

A follow-up court order said Roxane's share included any retired pay Richard later waived to collect disability benefits, and that if he did anything to cut her share, he would pay her the difference himself.

In 2021, the Guard medically retired Richard, and his retired pay became disability-based. When Roxane asked the Defense Finance and Accounting Service, which pays military retirees, to start sending her share, it said no: "The entire amount of the member's retired/retainer pay is based on disability, thus there are no funds available for payment under the USFSPA."

A North Dakota trial court tried to fix the problem by ordering Richard to pay spousal support equal to the share Roxane lost. On March 4, 2026, the North Dakota Supreme Court reversed, holding that "[a]ny order of the court requiring indemnification of a veteran's former spouse for military retirement pay waived for disability pay is preempted by federal law and void." The Chief Justice joined the opinion but wrote separately that "the result is inequitable to Roxane Marschner" and would have let the trial court look for another remedy.

Why Disability Pay Changes the Math

A federal law, the Uniformed Services Former Spouses' Protection Act (USFSPA), lets state courts treat a service member's "disposable retired pay" as marital property. That definition leaves out retired pay a veteran waives to receive VA disability compensation and the disability-based part of a medical retirement.

Federal law generally does not let a veteran collect full retired pay and full VA disability compensation at the same time. The main exception, Concurrent Retirement and Disability Pay, covers retirees with at least 20 years of service and a VA rating of 50 percent or more. Everyone else, including many medical retirees and veterans with lower ratings, gives up part of their retired pay to receive the same amount as tax-free disability pay. Every dollar that moves to the disability side is a dollar the former spouse's share can no longer reach.

The Supreme Court has dealt with this twice. In Mansell v. Mansell (1989), it held that state courts cannot divide retired pay waived to receive disability benefits. In Howell v. Howell (2017), an Arizona court ordered a veteran to reimburse his former wife after a waiver years after the divorce shrank her share. The Supreme Court struck that order down, saying the difference between an order to reimburse or indemnify and an order dividing the pay "is semantic and nothing more."

What the Supreme Court Agreed to Decide

Howell involved an order a judge imposed after the fact. Marschner asks about a promise made as part of the divorce deal: "Does the USFSPA require state courts to refuse enforcement of indemnification provisions in divorce settlement agreements?"

State courts are split. Roxane's petition counts the highest courts of Virginia, Illinois, Nevada, and Alaska, plus appeals courts in Tennessee and Washington, as enforcing these promises, on the view that federal law limits what a judge can divide and leaves a veteran free to agree to pay. On the other side are North Dakota, the Michigan Supreme Court, and appeals courts in Minnesota, Kansas, and Alabama, which read Howell to bar these promises even when the veteran agreed to them, though Michigan still enforces older decrees that were never appealed.

The Arguments on Each Side

Roxane's lawyers argue that rights created by a statute can usually be waived by agreement and that nothing in the USFSPA says otherwise. In their view, enforcing a bargained-for promise protects former spouses, the people the law was written for, and lets a veteran trade the promise for something up front, which they say Richard did when he took the $50,500 and the $90,000. Howell, they say, was about a judge rewriting a decree after the fact.

Richard's lawyers argue the question is already answered. The Mansells had a property settlement too, and the federal definition of a divorce "court order" includes a "court ordered, ratified, or approved property settlement." A separate federal law treats an agreement giving someone else the right to a veteran's disability compensation "for consideration" as a prohibited assignment. They also call this case a poor fit for the question, because the pay-back language sat in a separate court order and because the trial court wrote a new spousal support award instead of enforcing the decree as written. And they say state law already has ways to fix a lopsided result, such as reopening the property division.

What Happens Next

As of October 20, 2026, no argument date has been set. Written briefs come first, argument will most likely take place in early 2027, and a decision should come by the end of the Court's term next summer. Until then, the North Dakota ruling stands, and each state's courts keep following their own appellate decisions.

Why This Matters in Mississippi

Camp Shelby sits just south of Hattiesburg, and many Pine Belt families include someone who served in the Guard, the reserves, or on active duty.

The Mississippi Supreme Court faced a version of this problem in 2012, in a Lamar County case, Mallard v. Burkart. The settlement gave the wife 40 percent of her husband's disposable military retired pay. After he took a disability rating, her monthly payments fell from $571 to between $80 and $120, and the chancellor ordered him to pay her $21,213.57 to make up the difference. The Supreme Court reversed: "Whatever the equities may be, state law is preempted by federal law, and thus, state courts are precluded from ordering distribution of military disability benefits contrary to federal law."

The Mallards' agreement had no clause requiring the husband to cover a reduction, and the Court agreed with a Vermont decision that stated its rule "at least when the original property division order states an exact percentage and contains no indemnity provision." Mallard's own language is broad, though: it said federal law keeps state courts from "according any relief" for the lost share. We have not found a Mississippi appellate decision since Howell that decides whether a bargained-for pay-back promise can be enforced.

In a 2023 Clarke County case, Manley v. Manley, the Court of Appeals upheld a $65,377.60 judgment under a settlement the court read to include the husband's VA-waived pay. The court noted that he never argued federal law made the provision void, so it did not decide that point, and two judges would have reversed.

And in a 2025 Jackson County case, McFall v. Osborne, the Court of Appeals refused to void an order, never appealed, that required a veteran to pay his former wife $800 a month as her half of military retirement that had been turned into disability benefits, and it upheld a contempt finding against him. A veteran who does not appeal, the court said, cannot attack the order later.

Alimony is a separate question. Howell said family courts can take a reduction in retired pay into account when they set or revisit spousal support, and in Steiner v. Steiner (2001) the Mississippi Supreme Court held that military disability benefits "were properly considered by the chancellor in the award of alimony." The award has to be real support, though. The North Dakota court threw out "spousal support" that simply matched Roxane's lost share, calling it "merely a semantic reframing" of a division of disability pay. A Mississippi alimony award still has to rest on the Armstrong factors.

What to Do Now

If you are divorcing a service member or veteran, or you are the one who served:

• Know what kind of pay is involved. Regular retired pay, disability retired pay, VA disability compensation, and concurrent-receipt pay all follow different rules. Ask for the retiree account statement and any VA rating decision.
• Ask whether a disability rating or medical board is pending. If one is, the divisible share could shrink.
• Price that risk into the division. Howell said a family court valuing the marital estate can account for the chance that some retired pay will later be waived. A settlement can too, for example by shifting more home equity, savings, or other retirement accounts to the spouse whose share is at risk.
• Think hard before waiving alimony. Both Marschners gave it up. Once waived, it may not be available later as a backstop.
• Put the Survivor Benefit Plan in writing. Richard had to name Roxane as his Survivor Benefit Plan beneficiary, and these elections come with strict paperwork deadlines.
• If your decree already has pay-back language, do not assume it is void or safe. The wording, where it appears, whether anyone appealed, and what the Supreme Court decides will all matter.

Frequently Asked Questions

Talk to a Lawyer

How the pension language is written today can decide what each spouse actually receives years from now. Lowrey, Fortner, & Miri P.A. handles divorce and property division cases for service members, veterans, and their spouses in the chancery courts of Forrest County, Lamar County, and across the Pine Belt. Learn more on our family law and Hattiesburg divorce pages.

Kimberly-Joy (KJ) Miri is a partner at Lowrey, Fortner, & Miri P.A. in Hattiesburg. She focuses her practice on family law, including divorce and child custody cases in South Mississippi's chancery courts.