Marital Property? Dividing the GI Bill in a Colorado Divorce

U.S. Army sergeant in front of American flag, carrying books.
Logo for Post-9/11 GI Bill.

The Post-9/11 GI Bill, created by the Veterans Educational Assistance Act of 2008, codified at 38 U.S. Code § 3301et seq as a successor to the traditional Montgomery GI Bill, is far more generous than its predecessor.

The Post-9/11 GI Bill is an extremely valuable asset – in Colorado Springs, the 2019 benefits provide up to $159,688 in benefits, comprised of $97,908 for 4 years of tuition assistance, $4000 for books & supplies, and $57,780 for 36 months of a monthly stipend. For a complete breakdown of the benefits, see the new article in the Military Divorce GuidePost-9/11 GI Bill Benefits in a Divorce.

Transferring GI Bill Benefits to Children or Former Spouse

GI Bill benefits may also be transferred to a spouse or children, providing that the member meets additional eligibility requirements. 18 U.S. Code § 3319(b). And since divorce does not terminate a beneficiary’s eligibility, as long as the election is made during marriage, a former spouse may use the benefits after divorce.

The member may modify or revoke the transfer at any time. 18 U.S. Code § 3319(f)(2).

However, the fact that the member may himself/herself choose to transfer GI Bill benefits at divorce does not mean the judge may order it. On the contrary, this $160K asset is beyond the reach of the court. Under federal law a state court judge may not treat the Post-9/11 GI Bill as marital property:

“Entitlement transferred under this section may not be treated as marital property, or the asset of a marital estate, subject to division in a divorce or other civil proceeding.”

38 U.S. Code § 3319(f)(3).

What motivation would a member have to transfer GI Bill benefits to a soon-to-be-ex? Simply put, if the member is not planning on using the benefits, he/she may use the GI Bill as leverage to get other concessions in the divorce. Alternatively, a member who is paying child support or maintenance has an incentive to ensure the former spouse receives a degree and the higher salary that comes along with it to reduce those payments.

Post-9/11 GI Bill Benefits as Income in a Colorado Divorce

Though the court may not treat the GI Bill as marital property in a divorce, it does not mean that the benefits are invisible to the judge. If the member is receiving GI Bill benefits, the monthly stipend counts as income, although the tuition assistance and book stipend does not. For a complete discussion of treatment of Post-9/11 GI Bill benefits for the purposes of child support and alimony, see our recent blog post, or the Post-9/11 GI Bill Benefits article in the Military Divorce Guide.

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