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FAQ – Military Survivor Benefits for Divorced Spouse

7 Frequently Asked Questions About Former Spouse Survivor Benefits in a Military Divorce

by Zoe Meigs

1. What are military retirement survivor benefits?

Military retirement payments, often one of the largest assets in divorces involving military service members, end at the retiree’s death for both the retiree and the former spouse of the retiree. If, however, the service member (the “SM”) has enrolled in the Survivor Benefit Plan (the “SBP”) and named the former spouse the beneficiary, then the survivor benefits will be paid as an annuity to the former spouse for the former spouse’s life. The annuity provided under the SBP replaces, in full or in part, upon the SM’s death, the monthly retirement payment the SM received prior to the SM’s death. The amount of the annuity is 55% of the base amount designated by the SM when the benefit is elected. Some orders state that the SM must elect SBP coverage for the former spouse at full retirement level. That means if the SM’s retirement is $2,500 per month the annuity for the beneficiary would be $1,375.

2. In a divorce, who is eligible for former spouse survivor benefits?

There are two divorce scenarios that provide the non-military spouse with an opportunity to be named the SBP beneficiary: 1) divorcing a retiree who elected at retirement to enroll in SBP, and 2) divorcing an active duty SM who agrees to name or is ordered to name the former spouse as beneficiary of the SBP at the time of divorce. Non-military spouses divorcing a retiree who did not elect at retirement to enroll in the SBP do not have the opportunity to obtain former spouse survivor benefits. There is no statutory minimum length of time a marriage must overlap with the military service for the former spouse to be eligible to be named the former spouse beneficiary.

3. What are the drawbacks for an SM in providing former spouse survivor benefits?

Two drawbacks for the SM of providing former spouse coverage under the SBP are 1) the SM cannot name another (future) spouse as the beneficiary, and 2) the entire cost of the SBP premium is deducted from the SM’s retirement check.

4. Are SMs required to enroll a former spouse in the SBP?

No . Active duty SMs with a spouse are automatically enrolled in SBP at no cost with the spouse as beneficiary. When an SM retires, the SM must have the written consent of the non-military spouse to discontinue SBP for the spouse. Naming a former spouse as beneficiary upon divorce is, however, solely within the SM’s discretion unless there is a court order mandating enrollment. One tactic for the SM who does not want to enroll the former spouse in the SBP is to stay silent about the SBP during the divorce negotiations. If the non-military spouse asks for the SBP, the SM may refuse. Then the only recourse for the non-military spouse is a court hearing to request the coverage. The longer the overlap of the marriage and the military service, the more likely it is that the non-military spouse will prevail in court on this issue all other factors being equal. The non-military spouse may not want to suffer the exposure and expense of a court hearing, however, so the SM may prevail on this issue by refusing to agree. There are, of course, divorcing SMs who willingly provide the SBP for their former spouse and voluntarily agree to doing so in the divorce.

During a divorce the non-military spouse who wants former spouse survivor benefits may want to propose that the non-military spouse be awarded a slightly smaller percentage of the SM’s disposable retirement pay than the marital fraction would otherwise produce. Reducing the former spouse’s share of the retirement shifts the cost of the SBP premium to the former spouse. See number 6 below.

5. Who pays the Survivor Benefit Plan Premium?

In effect, both the SM and the former spouse pay the premiums for the SBP. The Defense Finance and Accounting System (DFAS) deducts from the SM’s monthly retirement check the cost of the SBP premium from the gross retirement pay of the SM. This is the only manner by which DFAS will collect payment for the SBP. This means that the SM pays a portion of the cost of the coverage. For example, let’s say the former spouse is awarded 50% of the SM’s retirement pay, the gross retirement pay is $2,000 per month, and there is a premium of $150 for the survivor benefit coverage. The disposable retired pay is $1,850, the retired SM receives $925.00 and the former spouse receives $925.00. In other words, the SM has paid $75.00 for the former spouse coverage ($1,000 – 925) and the former spouse has paid $75.00 for the former spouse coverage. It should come as no surprise that many SMs would rather not pay the premium for a benefit for their former spouse.

6. Is there a way to have the former spouse pay the entire premium?

The short answer is “no.” DFAS will not deduct the premium in any manner other than off the top of the retired pay even if the court orders state that the former spouse shall pay the entire cost. A savvy divorce attorney for an SM may, however, during the divorce calculate a reduction to the former spouse’s percentage award of military retired pay to, in effect, shift the entire cost of the SBP premium from SM’s share of the retirement to the former spouse. If you are the SM, and you do not want to bear the burden of your former spouse’s benefit, ask your attorney to shift the cost of the benefit to the former spouse. If you are the non-military spouse wanting to be awarded former spouse SBP coverage, you might offer to be awarded a reduced percentage of the military retirement so that the SM receives more of the military retirement than the marital fraction would dictate. That way you are compensating the divorcing SM for the reduction to his retirement pay caused by the SBP premium coming off the top. A divorce lawyer with military divorce experience should be able to calculate the appropriate reduction in the former spouse’s share of the military retirement that results in shifting the cost of the SBP for the former spouse to the former spouse.

7. For a former spouse, what is the most important thing to know about the former spouse survivor benefit?

Any treatment of the SBP for former spouses is incomplete unless it underscores the importance of the DEADLINE to declare the intention to claim the benefit. If you are the former spouse who is awarded the former spouse survivor benefits, you must be proactive about meeting the deadline to declare your intention to claim the benefit. You or the SM must declare to DFAS the intent to claim the benefit within one year from the date of the court order awarding the benefit. The retired SM is supposed to inform DFAS by submitting a DD Form 2656-1 within one year of the divorce to change spouse coverage to former spouse coverage. It is imperative, however, that the former spouse not rely upon the SM to take care of the former spouse election. The former spouse should submit a deemed election on DD Form 2656-10 within the year after the date of the order awarding the SBP coverage, otherwise the benefit is irretrievably lost. If the SM is not yet retired, it is the former spouse’s obligation to submit the deemed election on the DD Form 2565-10. Even if you have an attorney for the divorce, as a former spouse you should be certain you have the tangible proof that DFAS has received the election from the SM or the deemed election for the SBP within the year. Ask your lawyer for a copy of the lawyer’s transmittal letter to DFAS with the retirement order and DD forms as well as a copy of the certified mail card (green card) showing the signature of DFAS staff evidencing receipt of the form.

Additional Information on SBP

For more information on the SBP check out the following web pages https://www.dfas.mil/retiredmilitary/provide/sbp.html and links listed thereunder, and http://www.military.com/benefits/survivor-benefits/the-survivor-benefit-plan-explained.html .

The linked article is written for lawyers, but it provides good information that is easy to understand for any person wanting to know more about SBP in divorces: https://www.americanbar.org/content/dam/aba/uncategorized/family/SBP-4-Lawyers.authcheckdam.pdf

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Disclaimer: The author is licensed to practice law in Texas. Each state has its own statutes and case law regarding military retirement benefits and survivor benefits. Please note that this material is written for a general audience and not with specific cases, facts or clients in mind. You should consult an attorney in your state about these matters if you are an SM or spouse of an SM and are going through a divorce

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