Why hello twin! You sound like me before I married my husband quite a few years ago and let me tell you his ex is CRAAAZY and extremely money hungry (I think she's on her 4th? husband now at 34, all military) and we've dealt with pretty much all of your story..right down to the military part.
Financial Incentive:
In regards to "huge financial incentive because of the military" The only huge incentive is the health care, he's already claiming out BAH at the with dependents rate so that's one to think about. Outside of the tax deduction (or in our case the marriage tax penalty) and the fact they move you when he moves when you get married there is NO financial incentive for him being married as it sounds like he already collects full BAH.
Child support and alimony:
you need someone WELL versed in this. You ask what can trigger a modification to start? Pretty much anything, either party can ask for one at any point in time. To go through with the modification, there needs to be a change in the childs needs, medical, or the financial situation of either parent. If she puts them in daycare it can go up, if he sees them less it can go up if he's still earning the same amount, every promotion, it can go up etc etc. DHs X quit her job a week before she filed, and hasn't worked in 14 years since, just so that she can earn a bigger check from her baby daddies (my husband was the first, she remarried a week after the divorce was finalized and had another kid with that guy).
CA is one of the most dickish states in the country for child support and alimony, and they seriously love to screw over service members from what we've seen. We've had a friend that lost a chunk of BAH when they rotated out and CA took 2 years to have a child support adjustment hearing (he lived in our basement because between child support and alimony he couldn't afford rent since it was well over half his GROSS pay) and another that had alimony "extended" for their ex wife six months before support was due to stop, the ex claimed she still couldn't find employment...he paid alimony for EIGHT years at that point and she still couldn't find a job. CA will always be where the modifications will be since that is where the kid lives. He will have to fly out for any and all court hearings unless all parties can agree to a teleconference (his wife always refused since she knew it cost us thousands each time he had to go out)
Most states won't allow them to consider your income at all for child support and alimony payments, just like you can't consider her new flames in the calculations. CA looks like they allow it in "extraordinary" cases which are defined as unemployment, underemployment, income reduction, and/or other reliance upon a new spouse's income. In extraordinary instances, it must be proved that children would suffer extreme hardship without imputing income of the new spouse. You really need to talk to a well respected lawyer to find out if you can be protected from that if you perhaps are a resident of a different state when you get married, would the CA law apply to you since you aren't a legal resident of the state at marriage?
In the child support agreement you really need to be careful with what is in the wording. Make SURE there is something in there that covers his ass if he has to move across country for his next assignment, who will pay for travel, will he fly to the child and stay there or will the child be allowed to be flown as an accompanied minor? Will child support be lowered to compensate for these costs? What will the schedule be for visitation in the event of a large distance move? Are there any time provisions for when he would have to file for a child support modification hearing in the event of losing a significant part of his salary if BAH is lowered? It cost us a small fortune to duke these things out with the ex.
DO NOT put his name on your house, if you rent or sell your house and move in with him I'd honestly say do it before you marry, file your taxes for that year then get married in the new year and keep that money separate without any chance of it being tied to his name.
Retirement:
She gets X portion of the RETIREMENT portion of his pay, Disability is protected by federal law. In the past guys would try to up the disability rate to lower the retirement pension, that no longer works since the advent of concurrent receipt. That said, there is nothing from stopping a judge from incorporating it into child support/alimony payments and it happens routinely. Anything he contributes to the TSP now she can't touch, however if you are thinking of him contributing to the TSP to lower his income for child support calculations, it won't work, they simply add that back into his net pay.
You also need to check and see if the Decree says anything about SBP, if he is required to maintain it for her then you are SOL on his pension annuity, if it doesn't say he has to maintain it with her as beneficiary he can name you to receive it upon his death (which would end her pension payments when he dies). If he does have to maintain it, she will continue to receive that portion of the pension after his death and you would get nothing. And remember, that pension payment is forever, he will NEVER ever ever be able to reclaim that portion of his retirement unless she dies...she could marry 7 other guys and she will still be entitled to it. Same goes for if he has to maintain her or the child on his SGLI.
Kids:
Whelp wish I could help you on that one, we went through the same thing, she started going to out of network doctors just to piss him off (did I mention she's 150k in consumer debt at the moment, she just keeps putting this stuff on CC's). It was in the decree that he had to pay 50% of non covered medical. We fought this and finally won in the last modification that she needs to show cause since she's in network...so she moved farther away. Now we just make things immensely difficult for her to get these payments. We required certified receipts, and if she mails them snail mail we say we didn't get them, and then make her spend the 10 bucks doing certified mail. To which we then send only to a registered post office box that we put her name on, that she has to go to the post office to sign for. She's as lazy as they get so this went on for 5 months, cost her an arm and a leg for a 10 dollar script, and she gave up and started taking him to his in network providers again.
The half sister and brother are not welcome at our house point blank. Neither of us wants the liability and frankly daddy time is for him to spend time with his father, not his father to be distracted by another child. This one is fairly easy since we've never lived in the same state. In your case maybe invest in an umbrella policy?
We have a trust set up that his sister controls that has assets for his son (protection from me, my idea). Everything else goes to me, she wouldn't be able to fight it since he left providing enough assets to cover a moderate amount of child support until the childs 18th bday (protection from her).