Site Index • Wiki • Blog
Area Method -
Practicum and Example
Brian Mork, Ph.D. [Rev 2.1]
Other web pages document the mechanics, and describe the utility and
appropriateness of the Dual Coverture Value Area Method
(DCV-AM) to divide military retirements in case of divorce. In
short, DCV-AM is an improvement to prior methods that gives the same
results. DCV-AM is easier
for the courts, more lucid, more simple, more
capable. It is capable of equitably dividing retirements
equitably when other methods can not. This document gives
practical steps to
implement AM in your case.
The Area Method discussed
on this page is applicable to
Duty and Reserve
military retirements. If you are intested in Reserve military
please also see another web page about dividing
military reserve retirement pay. Other web pages deal with law and statutes, promotion enhancements,
Equitable intent must
drive the appropriate methods.
It would be wrong to use insufficient methods and warp the Court's
intent for equity by saying, "But xxx is the formula we use in our state."
That shoe-horns every person into a simplistic view of the world that
may not be equitable. Yet this is what often
happens because attorneys and Courts feel unable to deal with the
complicated government bureacracy and uniqueness of military
situations. DCV-AM solves this problem.
First, determine the intent of both sides of a divorce. The
answer to these questions are
documented in the first four columns of the table below, and then the
division methods that can be used are listed in the right column.
To understand implications of your selection, you must also see the
chart on the Area Method web page. Settling the answer to
these questions needs to be done before wasting anybody's time on
hashing out court order division language.
In all cases tabulated below, both parties receive annual inflation
time value of money while waiting for retirement payment to
start. This is
accomplished via military pay raises when using DCV-AM,
Coverture (DC), and Single Coverture (SC) fraction methods. In contrast, DFAS
Hypothetical Method (HM) accomplishes this
by giving Federal COLA numbers to the ex-spouse and military pay
raises to the military member. Such a difference could be
inequitable to either
person based on unkown future numbers. There is no advantage to the
HM over DCV-AM and intentional inequity should be avoided.
aside retirement service credit earned before marriage?
aside retirement service credit earned after marriage?
||Set aside promotion
enhancements actively earned before marriage?
|Set aside promotion
enhancements actively earned after marriage?
||Use This Division
|Only DCV-AM can do this.
|DCV-AM or DC.
|DCV-AM, DC, or HM.
|DCV-AM or DC.
|DCV-AM or SC.
|SC. Inappropriate civilian division method.
|Violates the law in most
Area Method Case Study Example
The Area Method is based on creating and using an area diagram.
The end result is a percentage number to send to DFAS. Or, if the
military member is not retired, you'll send the formula to DFAS and
they will plug in numbers known only at retirement in order to
calculate the percentage number at that time. The percentage is
calculated using a numerator and a denomintor. Here's how to
Creating and using the diagram is straightforward. Follow in the
example below. You can also plug the numbers into a spreadsheet that
automates the calculations. Download the Dual
Coverture Value Calculator
spreadsheet from the references
STEP 1 - Collect the retirement Duty Credit information you will
(months or points/30). See the column in the table below.
Collect the Rank, Longevity, and Basepay information you will
need, summarized in the table below. Notice if you're a
Reservist, longevity is your total service years used to look up on a
pay chart, while duty credit is (retirement points/30) as mandated by
mandated retirement formula.
the division order is written, grayed future numbers in this row are
impossible to know. DFAS will supply these numbers upon
The numbers shown here are guessed numbers, provided only so a complete
case study and
demonstration can be shown before retirement actually happens.
+The exact year used to look up base pay doesn't
matter because only pay ratios
matter. Year to year, although the numbers will change, the
not. In this example, 2009 was chosen because that's when
STEP 2 - Draw the area diagram. Drawing the diagram is optional,
but it really
helps visualize things. The white area is marital property and
will be divided. The hashed and dotted areas are belong solely to
military member because they were actively earned without any
contribution by the ex-spouse.
- On the horizontal axes, write down the amount of duty
accrued at each transition of life (marriage, divorce, retirements) out
to 3 decimal places. Active Duty use months; Reservists use
- For the vertical axes, look up military monthly base pay at
each transition of life. It is
important to use the same year paychart for all lookups even though the
events occured at different years. It is often convenient to use the
year of divorce since that’s when
everybody is looking at the issue.
STEP 3 - Write down how to calculate the marriage
portion of the diagram,
by looking at the diagram. All the numbers should be
because this will be based only on present day or history. This will be
the coverture fraction numerator. In the formula below, D is the
or divorce (according to the subscript), and V is the value of a year
at marriage or divorce (according to the
Numerator = ( DDVD
) (big white square minus the dotted area in the lower left)
Numerator = (210 * 6853.80 - 37.633 * 4148.10)
Numerator = 1283191
STEP 4 - Write down how to calculate the total
area of the diagram. This may contain numbers you don’t know yet
retirement points. This will be the coverture fraction
denominator. In the formula below, DR is
the duty at retirement, and VR is the value of a year at
retirement. If you are not yet retired, you cannot provide the
numbers - rather you have to leave the retirement numbers unspecified
the order and tell DFAS to put them in later.
Denominator = DRVR
Denomintor = (263.333 * 7928.70)
STEP 5 - Write down the words to divide the numerator by the
You will get a fraction 0.0 to 1.0, which is the coverture
Coverture Fraction = 1283191 / 2111677
Coverture Fraction = 0.607665
The ex-spouse typically receives a portion equal to 1/2 of the
coverture fraction, or
30.38% of the retirement monthly paycheck in this case,
STEP 6 - The division order language will be 50% times the coverture
fraction times the monthly disposable retirement pay. Something
other than 50% may be used if the marital asset is not
The legal language to implement the Dual Coverture Value or Area Method
is given here. This is
the textual equivalent of the steps above, telling DFAS how to do the
fraction. If retirement has not happend, this paragraph is the
only part that goes to DFAS. If retirement has happened, just
send DFAS the percentage.
“The former spouse is awarded a
percentage of the member’s disposable military retired pay each month,
computed by multiplying 50%
times a Coverture Fraction. The Coverture Fraction numerator is 1283191.
Fraction denominator is member’s total number of retirement duty months
times basepay at time of retirement. Basepay values
for this formula will be looked up on the 2009
year pay chart. If a Reserve retirement is obtained, duty months =
Notice that the charted base pay at time of retirement is used in the
coverture fraction even though it may not be used to calculate actual
retired pay. To calculate retired pay, "High-3" base pay might be
used, or maybe a 1% reduced base pay, or other numbers based on future
law. It doesn't matter. For the formula to work, we need
actual charted base pay because we care only about the ratio of pay
values on the chart.
STEP 7 - Remember, nobody knows the exact point count or pay grade
member will in the future retire. The only numbers DFAS will
provide later are the retirement values. The court division order
provide all the other numbers as shown in the quoted texts above.
To finish this example, the 2009 paychart shows the retirement pay
would be $4399.33 in 2009
coverture fraction would be 60.77%, so the marital asset is $2673.32
per month, and each spouse gets half. The spousal fraction
calculated by DFAS would be
30.38%, or $1336.66 per month in 2009 dollars. Notice the
ex-spouse amount includes the time value of money between divorce and
retirement. Both will
continue to get annual raises as the pay chart goes up each year.
Consider More than Monthly Amount
Selecting the proper method from the table above will correctly divide
the monthly retirement paycheck for Active Duty military and Reserve
military, there is also a question of which paychecks are to be
divided. The value of the retirement asset includes attention to
dividing which checks in
dividing each check.
Besides dividing each monthly payment, don't forget if you are working
with a Reserve
with duty spanning 28 January 2008, some or all of the
monthly retirement payments before military member age 60 may not be marital assets. See the 3-D
Value section of the document "Attorney Instructions - Division
of Reserve and Active Duty Military
Retirements" from the references below, and
the web page
"Attorney Guide Dividing Military Reserve Pay".
Traditionally, Reserve military retirement checks start when the
military member turns
of age because that's when a Reserve retirement begins to pay
out. However, 10 USC 12731(f)(2)(A) created a new and
quantifiably separate retirement for Reservists that does not comingle
in any way with the traditional retirement, and is created and is
accrued only based on military duty after January 28, 2008. If
the ex-spouse did
not participate in earning the new benefit after that date, then the
additional checks earned after the marriage are not part of the marital
asset. For more detailed
reading, see the Reservist
retirement division web page
or the bottom of the Area Method web
- Mork white paper: "A Better
Method to Equitably Divide Military Retirements Upon Divorce", 2016.
- Excel spreadsheet for doing Dual Coverture Area Method, 2016.
- Mork white paper: "Attorney
Instructions - Division of Reserve
and Active Duty Military Retirements", 2011.
- 10 USC 1408 Uniformed Services Former Spouses' Protection Act (house.gov, local copy)
- DOD 7000.14-R Vol 7B "Military Pay Policy - Retired Pay" Chapter 29. Regulatory guidance replaces DFAS attorney guides as of September 2015. (defense.gov, local
- DFAS "Guidance on Dividing Military Retired
Pay", March 2014, 25 pdf pages
with bad formatting, 121 KB pdf. (DFAS.mil, archive copy).
- Older copy April 2012, 20 pgs, 119
KB pdf. (DFAS.mil, local
- Older copy "Attorney
Instructions - Dividing
Military Retired Pay", April 2001,
19 pgs, 74kb pdf. (DFAS.mil, local archive
DoD Report to Committees on Armed Services of the US Senate and
House of Representatives, 1998? 2002? (Defense.gov, local
pgs, 279kb pdf)
Coverture Does Simple Division Orders--reply
to William Troyan.
Letter to DFAS
recommending Area Method (Dual Coverture Method) replace the
Hypothetical Method in their published guidance.
Excel spreadsheet showing Area Method gives the same
results as Hypothetical.
This document was
edited using Kompozer. © 2016
Brian Mork, Ph.D.