In 1981 the Supreme Court held in McCarty v. McCarty, that the federal preemption doctrine prohibited the states from dividing military retirement pay. The inequity that this decision caused to former spouses led Congress to enact the Uniformed Services Former Spouses' Protection Act (USFSPA). It allowed the ability to divide military retirement pay to the states as marital property. When military retirement pay is divided as property, the former spouse receives either a lifetime annuity, if the court uses the retained jurisdiction method, or a large lump sum cash payment, if the court uses the present cash value method. Today spouses are more likely to be employed and make an economic decision to divorce because they are guaranteed a lifetime income with USFSPA.
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