Feb92026
Family Law Q&A Series

How are military retirement benefits and other service-related benefits handled in a divorce? – North Carolina

Short Answer

In North Carolina, the marital portion of a servicemember’s military retired pay is generally treated like other retirement benefits for equitable distribution and can be divided in a divorce-related property case. The key question is what portion was earned during the marriage and before the date of separation. Some service-related payments—especially disability-related benefits—often are not divisible as marital property, but they may still matter when a court looks at income for support.

Understanding the Problem

In a North Carolina contested divorce involving a military family, a common decision point is whether military retirement and service-related benefits count as property that can be divided, or instead are treated as income for support. The outcome often turns on the type of benefit (retired pay versus disability-related payments), when it was earned (during the marriage versus before marriage or after separation), and what paperwork is needed to make any division enforceable through the correct military or plan administrator channels.

Apply the Law

North Carolina divides property through equitable distribution. Retirement benefits—including military retirement that federal law allows states to divide—can be marital property to the extent they were earned during the marriage and before the date of separation. North Carolina generally values marital property as of the date of separation, then the court decides whether an equal split is fair or whether an unequal split is more equitable. For retirement benefits, North Carolina law also provides specific methods for distributing pensions and similar plans, including awarding a percentage payable when the benefit is paid, offsetting with other assets, or using an appropriate domestic relations order when required.

Key Requirements

  • Identify the benefit type: Military retired pay is often divisible (at least the “disposable” portion allowed under federal law), while disability-related benefits are commonly treated differently and may not be divisible as marital property.
  • Determine the marital portion: The court typically focuses on the part earned during the marriage and before the date of separation, often using a time-based fraction for benefits tied to years of service.
  • Use the right distribution method and order: The court can divide retirement benefits by percentage payments, by offsetting with other assets, or by an order that meets the plan’s technical requirements (including military payment rules where applicable).

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe a military family in North Carolina considering a contested divorce, so the main property question is whether there is military retired pay (or another retirement plan) earned during the marriage and before separation that should be classified and divided in equitable distribution. If the servicemember earned retirement credit both before and during the marriage, North Carolina typically treats only the portion earned during the marriage (up to separation) as marital. If a benefit is disability-based rather than retirement-based, it may not be divisible as marital property, but it can still affect support because the court can consider benefit income when analyzing alimony.

Process & Timing

  1. Who files: Either spouse. Where: North Carolina District Court (county where a proper venue exists). What: A claim for equitable distribution (often filed with other divorce-related claims). When: After the spouses begin living separate and apart; retirement benefits are generally measured through the date of separation.
  2. Financial disclosure and proof: The parties typically exchange the equitable distribution inventory affidavits and supporting documents. For military benefits, this often includes service dates, retirement points/credit, statements showing the benefit type, and documentation showing what portion was earned during the marriage versus outside the marriage.
  3. Order drafting and implementation: If the court (or a settlement) divides a retirement benefit, the final step is usually an order tailored to the specific system’s requirements. For many retirement plans this is a domestic relations order (and sometimes a QDRO). For military retired pay, the order must also be drafted to comply with the applicable federal payment rules so the division can be administered correctly.

Exceptions & Pitfalls

  • Disability-related benefits are often treated differently: Payments tied to disability (rather than retirement earned by service time) may be treated as separate property and not divisible in equitable distribution, even though they can still affect support analysis.
  • Not all “retirement” dollars are marital: Service time before marriage or after separation usually does not create marital property, and post-separation changes can be treated differently depending on what caused the change.
  • Order language matters: Retirement division orders are technical. If the order does not match the plan’s rules (or the military payment rules), the administrator may reject it or pay it in an unintended way.
  • Survivor benefits can be overlooked: Some retirement systems allow (or require) elections that affect whether a former spouse continues receiving payments after the servicemember’s death. If survivor coverage is important, it should be addressed directly in the settlement or court order.

Conclusion

In North Carolina, the marital portion of military retirement benefits is generally handled through equitable distribution like other retirement assets: the court focuses on what was earned during the marriage and before the date of separation, then divides it in a way the court finds equitable. Disability-related benefits often are not divisible as marital property, but benefit income can still matter for support. A practical next step is to file (or preserve) an equitable distribution claim in District Court and gather service and retirement records that show what was earned by the date of separation.

Talk to a Family Law Attorney

If you’re dealing with a contested divorce in a military family and need to understand how retirement pay and service-related benefits may be treated, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [CONTACT NUMBER].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Family Law Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.