Marschner v. Marschner: The Supreme Court Will Decide Whether a Divorce Deal Can Make a Veteran Repay a VA Waiver

On October 1, 2026 the Supreme Court granted review in Marschner v. Marschner, No. 25-1349. The question presented is one sentence: "Does the USFSPA require state courts to refuse enforcement of indemnification provisions in divorce settlement agreements?" That grant is settled. Nothing else is: the docket shows no argument date as of October 28, 2026, no merits briefs have been filed, and until the Court rules, the law in your state is whatever your state's courts have said.

Why a VA rating shrinks a former spouse's check

Under 10 U.S.C. 1408(c)(1) a state court may divide "disposable retired pay," and DFAS pays the former spouse no more than 50 percent of it (1408(e)(1)). The definition in 1408(a)(4)(A) subtracts, among other things, retired pay waived "in order to receive compensation under title 5 or title 38," and, for a Chapter 61 medical retiree, the pay computed from the disability percentage. Every dollar a retiree gives up to collect VA compensation leaves the pot the former spouse is paid from.

For a rating of 50 percent or more, concurrent retirement and disability pay under 10 U.S.C. 1414 lets most 20-year retirees keep both payments. Below 50 percent there is no CRDP, so the waiver is dollar for dollar. That is where the loss is sharpest, and where the table below lives. Run your own decree through the USFSPA calculator and your rating through the VA disability calculator.

What a 40 percent rating takes from a former spouse, by grade

Each row assumes a legacy High-3 retiree at 20 years (2.5% × 20 = 50%) whose pay base equals the 2026 "Over 20" basic pay rate, and a former spouse awarded 37.5% of disposable retired pay (half of a marital share covering 15 of the 20 years). The waiver is the 2026 VA rate for a veteran alone: $552.47 at 30% and $795.84 at 40%.

The dollar loss is the same at every grade: 37.5% of the waiver, or $207.18 a month at 30% and $298.44 a month at 40% ($3,581.28 a year). What changes is the bite. A former spouse of a retired E-6 loses almost a third of the award; the former spouse of an O-6 loses about a ninth. The retiree, meanwhile, swaps taxable retired pay for VA compensation that 38 U.S.C. 5301(a)(1) exempts from taxation. Real High-3 averages run below the Over 20 rate, so real awards will be somewhat smaller; the High-3 calculator gives yours.

What Howell already decided

In Howell v. Howell, 581 U.S. 214, decided May 15, 2017, an Arizona court had ordered a veteran to reimburse his former wife after a 20% rating cut her half of his retired pay. The Supreme Court reversed. "Regardless of their form, such reimbursement and indemnification orders displace the federal rule," Justice Breyer wrote, and calling the order reimbursement rather than division was "semantic and nothing more." The Court acknowledged "the hardship that congressional pre-emption can sometimes work on divorcing spouses" and said a family court "remains free to take account of the contingency that some military retirement pay might be waived" when it first values the marital assets.

Howell involved a court-imposed order. It did not decide what happens when the veteran signs the promise himself. State courts have split on that ever since.

That list is the petitioner's. The veteran's brief in opposition argues the five intermediate courts do not count toward a split and that the four high courts on the other side were enforcing agreements, not rewriting them. Michigan's second Foster decision (2022) also left that couple's final decree in place under res judicata.

The Marschner facts

Richard Marschner joined the North Dakota Army National Guard in 1985 and married Roxane in 1994. They divorced in 2016 by settlement. Richard received $50,500.00 from Roxane's 403(b) and a $90,000.00 equity payment; Roxane was to receive a share of his military retirement, set at 27.907%. A July 5, 2016 order, entered without objection, defined "military retirement" to include retired pay Richard "actually or constructively waives or forfeits," including any waiver "to qualify for Veterans Administration benefits including disability," and required him to pay her directly "in an amount sufficient to neutralize" any action that cut her payments.

In 2021 Richard was medically retired under Chapter 61 with a 60% rating, all combat-related. On August 6, 2021 DFAS denied Roxane's application: "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." The district court found arrears of $51,232.00 and ordered spousal support equal to her share. On March 4, 2026 the North Dakota Supreme Court reversed (2026 ND 66): "Even if the parties' agreement obligated Richard to indemnify Roxane for waived retired pay, federal law renders the obligation unenforceable." Chief Justice Fair McEvers concurred but wrote that the result "is inequitable to Roxane Marschner" and would have sent the case back to look for other relief.

The veteran's side says the case is a poor vehicle for the question. His brief points out that the 2016 settlement agreement itself does not contain the waiver language, which appears in the later order; that "the word 'indemnify' never once appears" next to retirement pay in the decree; and that the trial court did not enforce the decree but relieved Roxane from it and wrote a new order. He also argues Mansell v. Mansell (1989) already refused to enforce a negotiated split of waived pay. The Court granted review anyway.

Who should watch this case

A ruling for Roxane would let state courts enforce indemnity clauses that veterans signed, which could revive claims under existing decrees in states that now refuse them. A ruling for Richard would make those clauses dead letters nationwide, which matters to every former spouse who traded other property for a share of retired pay. Either way, a CRSC or CRDP choice can change how much retired pay is left to divide; the CRDP vs CRSC calculator shows both sides of that election.

Rates shown are FY2026 basic pay and VA rates effective December 1, 2025. Always verify with your finance office before making financial decisions.