Facts: Husband and Wife married in 1981. Husband served in the military from 1978 until his retirement in 2019. In 2010, Husband was recalled to active duty and relocated out of state. Wife did not move with him, and the parties lived separately from 2010 onward while remaining married.

In 2019, Husband filed for divorce. In 2023, the trial court granted Wife a divorce after Husband admitted to inappropriate marital conduct. By that time, Husband had been retired from the military for several years.

A point of dispute at trial was Wife’s share of Husband’s military retired pay. The court awarded Wife a portion of Husband’s military retirement, but limited her share to the amount that accrued during their marriage. Specifically, the trial court calculated Wife’s portion using a formula that counted 348 months of marriage (from January 1981 through January 2010, when Husband and Wife separated) out of Husband’s total months of military service. In other words, the court treated Husband’s retirement pay earned after their 2010 separation as Husband’s separate property, reasoning that Wife’s contributions to Husband’s career stopped once they were living apart. Wife was awarded 50% of the fraction of retirement pay representing those 348 months.

Wife appealed this calculation, arguing that it was erroneous to cut off her share on the date of their informal separation rather than on the date of Husband’s retirement.

On Appeal: The Court of Appeals reversed the trial court’s classification of a portion of Husband’s military retired pay as separate property and its division of that marital asset.

In Tennessee, marital property generally includes any assets—tangible or intangible—acquired by either spouse during the marriage, up to the time of the final divorce. This expressly includes the portion of pension or retirement benefits earned during the marriage, whether vested or not.

Military retired pay earned during the marriage is marital property subject to equitable division under Tennessee law. Even a lengthy physical separation does not change that classification unless there has been a legal separation order dividing the property. Tennessee’s statute provides that if marital property is divided as part of a legal separation, any property acquired by a spouse afterward is separate. Here, however, the parties never legally separated their property before divorce.

Tennessee caselaw holds that a spouse’s share of military retirement must be calculated using all months of marriage that overlap the service, not just the months of cohabitation, even if the couple separated years before the divorce was final.

Federal law (the National Defense Authorization Act of 2017) established a uniform method for dividing military pensions when the divorce occurs before retirement. However, when the service member has already retired (as in this case), Tennessee courts still apply state property-division principles.

The Court of Appeals concluded that the trial court misclassified part of Husband’s military retired pay as separate property and miscalculated Wife’s share. It held that Husband’s entire military retirement earned from the date of marriage until his retirement is marital property. The trial court’s use of the separation date effectively removed a marital asset from the marital estate, which was error.

Tennessee law provides that marital property “means all real and personal property, both tangible and intangible, acquired by either or both spouses during the course of the marriage up to the date of the final divorce hearing and owned by either or both spouses as of the date of filing of a complaint for divorce.” “Marital property” includes the value of vested and unvested pension benefits, vested and unvested stock option rights, retirement, and other fringe benefit rights accrued as a result of employment during the marriage. Therefore, the Trial Court should have considered Husband’s creditable years of service during the marriage, rather than the years of marriage up to the date Husband moved out of the marital home in its classification of this asset.

Given that the proportion of a member’s military retirement subject to division is the total years of the member’s years of creditable service divided by the overlap between the marriage and the member’s years of creditable service, Husband’s military retirement was marital property from the time of the marriage in 1981 until his retirement in 2019, not the date of their separation in 2010. Husband retired during the marriage; therefore, the Trial Court should have used his retirement date, rather than the separation date, in classifying the retirement as marital property, excepting his military service from 1978 to the date of the marriage in 1981.

We determine that the Trial Court erred by calculating Wife’s portion of Husband’s military retirement based on the date of the parties’ informal separation, rather than the date of Husband’s retirement from the military. We vacate the Trial Court’s classification of this marital asset as partially separate property and, as a consequence, its division of the marital estate as a whole. We remand this cause for the Trial Court to classify Husband’s military retirement as marital property from 1981 to 2019 and recalculate Wife’s portion of Husband’s military retirement using the number of months between the date of their marriage in 1981 and the date of Husband’s retirement in 2019. The Trial Court, however, is free to award Wife less than 50% of this fraction in order to account for the marriage’s inactivity from 2010 onward, if it finds it equitable to do so in accordance with TCA § 36-4-121.

The Court of Appeals noted that although the classification must encompass the entire duration of the marriage, the trial court retains discretion to award Wife less than a full 50% share of that marital portion if circumstances warrant, to achieve an overall equitable distribution.

K.O.’s Comment: It’s worth noting the interplay with federal law regarding military pensions. When a divorce occurs before the service member retires, federal law (NDAA 2017) requires using the date of the divorce decree to calculate the divisible portion of military retired pay. In those situations, Tennessee courts follow that rule, effectively freezing the marital portion as of the divorce. But in a case like this, where Husband had already retired by the time of divorce, that federal “freeze” rule didn’t apply. The trial court thought this gave it free rein to use the separation date, but the Court of Appeals corrected that misstep by enforcing state law definitions.

Practically speaking, couples who separate for extended periods should be aware that, unless they have a legal separation order dividing their property, assets such as pensions will continue to accrue as marital property until the divorce is final. If a spouse is concerned about losing rights to future accruals, pursuing a legal separation (or at least an agreement formalizing the cutoff) might be advisable. Otherwise, as seen here, the spouse who moves out may later find the other spouse still has a claim on assets accumulated during the separation.

Source: Prather v. Prather (Tennessee Court of Appeals, Middle Section, December 23, 2025)