What Happens to the Survivor Benefit Plan (SBP) After a Military Divorce?

For military families in Prince William County and beyond, few financial issues carry more long-term significance than the Survivor Benefit Plan. When a military marriage ends, service members and spouses often focus on dividing military retired pay. SBP coverage, however, is a separate benefit that requires careful attention during divorce negotiations. Failing to address it properly can result in the permanent loss of survivor income protection.

What Is the Survivor Benefit Plan?

The Survivor Benefit Plan is a Department of Defense program that provides a monthly annuity to a designated beneficiary after a retired service member dies. The annuity replaces a portion of the retiree’s military retirement pay, offering the survivor a continued source of income.

SBP coverage is not automatic. A service member must elect coverage at retirement, and the monthly premiums are deducted from the retirement pay. The maximum SBP annuity is 55 percent of the covered retirement base amount. Without an election in place, a surviving spouse or former spouse receives nothing upon the retiree’s death, regardless of how long the marriage lasted or how dependent the spouse was on that income.

How Military Divorce Affects SBP Coverage

SBP provides income after the retiree’s death, making it an important consideration during divorce negotiations. Overlooking it can significantly affect a former spouse’s long-term financial security. Under federal law, a divorce does not automatically change SBP beneficiary designations. If a service member had elected spouse SBP coverage before the divorce, that coverage does not simply transfer to a former spouse. The divorce terminates spouse coverage by operation of law unless specific legal steps are taken to convert it to former spouse coverage.

Military retirement benefits and SBP serve different financial purposes. Military retired pay provides income to the retiree during his or her lifetime. SBP provides income to the survivor after the retiree’s death. Dividing military retirement pay in a divorce settlement does not address what happens when the retiree dies. A former spouse who is entitled to a share of military retirement pay under a court order could receive nothing after the retiree’s death if SBP coverage was never properly addressed.

How Former Spouse SBP Coverage Works

Federal law permits a service member to elect former spouse SBP coverage voluntarily, or a court may order it as part of a divorce settlement. Either path requires action within a specific timeframe.

A voluntary election by the service member must be made within one year of the divorce. If the service member does not make the election voluntarily, the former spouse may request a deemed election through the Defense Finance and Accounting Service (DFAS). A deemed election must be submitted within one year of the court order requiring the coverage. Missing this deadline generally eliminates the former spouse’s ability to obtain SBP protection, regardless of what the divorce decree requires.

Former spouse SBP coverage is intended to provide long-term protection. Once that coverage becomes effective, changing or terminating it may be limited under federal law. For that reason, these decisions should be addressed carefully during the divorce process rather than revisited later.

Key Challenges in Protecting SBP Rights

First, the parties must decide who bears responsibility for the SBP premiums. Whether the cost is shared, offset through other property division, or assigned entirely to one party should be addressed explicitly in the settlement agreement.

Second, remarriage affects SBP coverage. If a former spouse remarries before age 55, SBP benefits are suspended. If that marriage ends, coverage may be restored, but the former spouse must notify DFAS promptly to reinstate it.

Third, the interplay between SBP and the Uniformed Services Former Spouses’ Protection Act (USFSPA) requires careful coordination. USFSPA governs the division of military retired pay; SBP is governed by separate statutory provisions. Both must be addressed in the divorce decree and related orders to ensure the former spouse’s financial interests are protected on both fronts.

Why Careful Planning Matters

Decisions involving the Survivor Benefit Plan can affect financial security long after a military divorce is finalized. Addressing SBP coverage correctly during the divorce process can help prevent avoidable disputes and protect important survivor benefits in the future.

The attorneys at Michael Kevin Murphy, PLLC have served military families since 1982 and regularly assist clients with military retirement division, Survivor Benefit Plan issues, and related military divorce matters throughout Northern Virginia and around the world. Attorney Michael Kevin Murphy is a VMI graduate and former U.S. Army officer whose background informs the firm’s practical, experienced approach to military family law.

To schedule a confidential consultation, call (703) 385-9330. Video consultations are available.

Frequently Asked Questions

Does divorce automatically change SBP coverage to a former spouse?

No. Divorce terminates spouse SBP coverage by operation of law. To convert coverage to a former spouse, either the service member must make a voluntary former spouse election within one year of divorce, or the former spouse must file a deemed election with DFAS within one year of the qualifying court order.

Is the Survivor Benefit Plan the same as military retirement pay?

No. They are separate benefits. Military retirement pay provides income to the retiree during his or her lifetime. SBP provides a monthly annuity to a designated survivor after the retiree’s death. Dividing military retirement pay in a divorce does not address SBP, which must be handled independently.

What happens if the one-year deadline for a deemed election is missed?

Missing the deemed election deadline generally results in the permanent loss of the former spouse’s ability to obtain SBP coverage. If the former spouse fails to submit the required documentation to DFAS within one year of the court order, federal law generally provides no mechanism to extend that deadline.

Who pays the SBP premiums after a military divorce?

The divorce settlement agreement should specify who is responsible for SBP premiums. Premiums are deducted from the retiree’s retirement pay, so the parties often address this through a direct offset or other property division arrangement.

Does a former spouse lose SBP coverage if they remarry?

Yes, generally. SBP benefits for a former spouse are suspended upon remarriage before age 55. If the subsequent marriage ends through death or divorce, the former spouse may apply to have coverage reinstated, but must notify DFAS promptly to do so.