Military Member Divorcing A Spendthrift Spouse? How Should You Protect Yourself?

Money issues are one of the most common causes of divorce -- and the frustration of having a spendthrift spouse fritter away the money you work hard to earn can cause division in even the most solid marriages. In most cases, you'll be able to part ways in divorce simply by dividing the named accounts and debts with your ex-spouse. However, if you're a member of the armed forces, this process can become a bit more complex. If your ex-spouse has racked up debt in his or her name, this bad credit could potentially affect your current security clearances (or your ability to qualify for future clearances). And because of the laws governing the division of a military pension, you could find yourself earning a lower income due to credit issues while also losing half your expected retirement funds. Read on to learn more about the steps you'll need to take to protect yourself as a military member while divorcing a spouse who can't stop spending.

What should you do to protect your security clearances during divorce?

Having a security clearance can make you both employable and highly desirable -- when making a lateral or upward move between employers, your security clearance will help you gain priority status over other applicants. Safeguarding the status of your security clearance can be crucial when it comes to career mobility and financial freedom. One of the biggest components of your ability to gain and maintain a security clearance is sterling credit. Racking up consumer debt, making late payments, or having accounts sent to collections can (in the eyes of those granting your clearance) make you more vulnerable to blackmail or bribery than other clearance holders, and can show poor judgment and decision-making capabilities.

If your spouse has already engaged in behavior that causes you to question his or her honesty regarding finances, you may want to freeze your credit as soon as you begin contemplating divorce. This will prevent your spouse from taking out any extra credit in your name, and can help you more easily segregate your finances from your spouse's when the military divorce is finalized. You'll also want to pull a copy of your credit report to ensure that you are aware of all credit in your name -- if you're not responsible for taking out some of these debts, you may be able to secure an agreement from your spouse to pay off these debts for you, or to give up other marital assets in exchange for this debt.

How will your pension be divided?

One of the most valuable assets you'll acquire during the years of your military service is your pension. Like the pensions often given to law enforcement officers and firefighters, this pension can allow you to begin collecting a portion of your previous annual income at a relatively young age -- after only 20 years of service. And if you and your spouse were married for at least 10 of these 20 years, your spouse could be entitled to up to half of your pension for decades to come.

The division of your military pension is not automatic -- and in many cases, it may be more advantageous to offer your spouse other marital assets in exchange for disclaiming any right to your pension, rather than to allow him or her access to a permanent stream of money that will likely be squandered. By entering into an agreement that will allow you to keep your pension, you'll be able to keep your retirement on track and continue to build up future assets without knowing that a portion of these assets will go to your ex-spouse.