Military retirement pay is often the most valuable financial asset in a military divorce. But military retirement pay has a fundamental limitation that civilian pensions do not share in the same way: it ends when the service member dies. For a former spouse who has been awarded a share of that retirement pay as part of a divorce settlement and is counting on it as a long-term income source, the service member’s death can eliminate that benefit entirely, regardless of what the divorce decree says.
The Survivor Benefit Plan exists precisely to address this problem. It is a federal annuity program that can provide a former spouse with continued income after the service member’s death. Whether SBP coverage is included in a military divorce decree, and how it is structured, is one of the most important and most frequently mishandled decisions in military divorce planning.
For military families in the Tampa Bay area, understanding what the SBP is, what it costs, what it provides, and what happens if it is not addressed properly in the divorce decree is essential to making informed decisions in what is often the most financially significant legal proceeding of their lives.
What the Survivor Benefit Plan Is and How It Works
The Survivor Benefit Plan is a Department of Defense program that provides a monthly annuity to a designated beneficiary after a military retiree’s death. The annuity is paid as a percentage of the retiree’s covered retired pay, which is called the base amount. The standard SBP benefit pays the beneficiary fifty-five percent of the base amount each month for the rest of the beneficiary’s life.
SBP coverage is not free. The cost is six and a half percent of the elected base amount per month, paid from the service member’s retirement pay. The premium reduces the service member’s net monthly retirement check, but the benefit it provides to the beneficiary is substantially larger than what a comparable commercial annuity would cost in the private market, largely because the SBP is subsidized by the federal government.
SBP benefits are adjusted annually for inflation through cost of living adjustments, which means the benefit maintains its real purchasing power over time. This inflation protection is a significant advantage over a fixed dollar amount that does not adjust with the cost of living.
A service member can designate different categories of beneficiaries under the SBP, including a current spouse, a former spouse, children, or a combination. In the divorce context, the relevant beneficiary category is the former spouse. Designating a former spouse as SBP beneficiary requires specific steps and has specific requirements that differ from simply naming a current spouse.
Why SBP Coverage Matters in a Military Divorce
The importance of the SBP in a military divorce comes down to a simple fact: military retirement pay dies with the retiree. A former spouse who is awarded fifty percent of a service member’s disposable retired pay in a divorce decree receives that payment for as long as the service member is alive and receiving retirement pay. The day the service member dies, the payments stop.
For a former spouse who is in their fifties or sixties and has been receiving retirement pay for years, this outcome can be financially devastating. What seemed like a secure income stream disappears without warning, and the former spouse has no legal recourse to recover those payments or continue receiving them without SBP coverage in place.
The math illustrates why this matters. Consider a service member whose disposable retired pay is four thousand dollars per month. A former spouse awarded fifty percent receives two thousand dollars per month. Over ten years, that is two hundred forty thousand dollars. If the service member dies after ten years and there is no SBP, those payments end immediately. If the former spouse had been covered by SBP at the standard fifty-five percent rate, they would continue receiving one thousand one hundred dollars per month for the rest of their life.
Whether that continued income stream justifies the cost of SBP premiums is an individual financial calculation that depends on the ages of both parties, the service member’s health, the amount of retirement pay at stake, and the former spouse’s other income sources. What is not optional is understanding the issue and making a deliberate decision about it. A former spouse who discovers after the service member’s death that SBP coverage was never established has no remedy at that point.
A Tampa military divorce lawyer who regularly handles military retirement pay issues treats the SBP question as a mandatory part of every military divorce discussion, not an afterthought.
The One-Year Election Deadline: The Most Critical Detail
The most important and most frequently missed aspect of the SBP in a military divorce is the election deadline. When a military divorce is finalized, there is a one-year window within which the SBP election naming the former spouse as beneficiary must be made and the appropriate paperwork submitted to the Defense Finance and Accounting Service, known as DFAS.
If the election is not made within that one-year window, the former spouse permanently loses eligibility for SBP coverage, regardless of what the divorce decree says. No exception applies. No amount of subsequent court orders can restore the eligibility once the deadline has passed. The former spouse’s SBP coverage is simply gone.
This deadline is not self-enforcing. No government agency sends a reminder that the deadline is approaching. DFAS does not contact the former spouse to ask if they want to be enrolled. The responsibility to make the election and submit the required paperwork within the one-year window falls entirely on the parties and their attorneys.
The mechanics of the election require specific steps. The divorce decree or a separate court order must specifically require the service member to elect SBP coverage for the former spouse. The service member must then submit a completed DD Form 2656-6 to DFAS along with a copy of the court order, within one year of the divorce. If the service member fails to make the election voluntarily, the former spouse can submit a written request to DFAS and a copy of the court order to establish a deemed election, which DFAS can implement even without the service member’s direct action.
The deemed election process is the safety net that protects former spouses when service members fail to comply with the court order. But the deemed election still must be submitted within the one-year window. A Florida military divorce attorney handling a case that involves SBP will track this deadline and ensure the appropriate paperwork is submitted on time, whether through the service member’s voluntary compliance or through the deemed election process.
How the SBP Is Addressed in a Divorce Decree
For SBP coverage to be established for a former spouse, the divorce decree or a separate court order must specifically address it. A decree that awards a former spouse a share of military retirement pay but says nothing about the SBP does not establish SBP coverage. The omission is not corrected by implication, and the former spouse has no SBP protection unless the decree explicitly requires it.
The decree should include several specific elements related to the SBP. It should state that the service member is required to elect former spouse SBP coverage at the maximum base amount or at a specified base amount. It should identify the former spouse by name and Social Security number. It should specify that the election must be submitted to DFAS within the one-year deadline. And it should include language that addresses what happens if the service member fails to make the election voluntarily, authorizing the former spouse to submit a deemed election request.
Some decrees go further and address how the cost of SBP premiums interacts with the retirement pay division. If the service member is paying SBP premiums, those premiums reduce the net disposable retired pay available. A decree that awards the former spouse a percentage of disposable retired pay without addressing SBP premiums may produce a different result than intended if the premium cost was not factored into the calculation.
The interaction between SBP premiums and the retirement pay division is a drafting issue that requires careful attention. A military divorce lawyer in Tampa drafting a retirement pay division order and SBP provision will work through this interaction explicitly to ensure the financial result is what the parties intended.
The Cost-Benefit Analysis of SBP Coverage
For both parties in a military divorce, the SBP involves a genuine cost-benefit analysis that should be part of the negotiation.
For the former spouse, the benefit is clear: continued income after the service member’s death. The cost, in the context of negotiation, is that SBP premiums reduce the service member’s net retirement pay, which may result in a lower base on which the former spouse’s percentage is calculated.
For the service member, the SBP premium is a real monthly cost that reduces their net retirement income. At six and a half percent of the base amount, the premium is not trivial. For a service member receiving three thousand dollars per month in retirement pay and electing full SBP coverage, the premium is one hundred ninety-five dollars per month.
Whether SBP coverage is worth the cost depends primarily on the ages and health of the parties and the probability that the service member will predecease the former spouse. The younger the former spouse and the older or less healthy the service member, the more valuable the SBP coverage is. For a former spouse who is significantly younger than the service member and expects to live for many years after the service member’s death, SBP coverage can be worth hundreds of thousands of dollars in lifetime benefit. For parties who are close in age and both in good health, the calculation is less clear-cut.
Independent financial advice from a certified financial planner familiar with military benefits can be valuable in working through the SBP cost-benefit analysis. A Florida military divorce attorney who understands the SBP framework can provide the legal structure while a financial planner provides the actuarial analysis.
SBP and the Interaction With VA Disability Compensation
One complication that affects the SBP in some military divorces is the interaction between the SBP and VA disability compensation. Historically, the SBP annuity was offset by Dependency and Indemnity Compensation, known as DIC, when the retiree’s death was service-connected. This was known as the SBP-DIC offset and meant that former spouses who received DIC had their SBP benefit reduced dollar for dollar by the DIC amount, eliminating the financial benefit of SBP coverage in cases where DIC was significant.
Congress eliminated the SBP-DIC offset through legislation that was phased in over several years and became fully effective in January 2023. As of that date, former spouses who are SBP beneficiaries can receive both the full SBP annuity and DIC without any reduction. This change significantly increased the financial value of SBP coverage for former spouses of veterans who died from service-connected conditions.
The elimination of the SBP-DIC offset is a recent and important development that changed the financial calculation for some military families. A Tampa military divorce lawyer advising clients on SBP coverage in 2024 and beyond will incorporate this change into the analysis, particularly for cases involving service members with existing service-connected disabilities who may be at elevated risk of a service-connected death.
What Happens to SBP Coverage If the Former Spouse Remarries
SBP coverage for a former spouse is affected by remarriage, and the rules vary depending on the age at which the former spouse remarries.
If the former spouse remarries before age fifty-five, the SBP coverage is suspended during the subsequent marriage. The former spouse does not receive SBP benefits while married to another person. If the subsequent marriage ends by death or divorce, the former spouse can apply to have SBP coverage restored, but they must notify DFAS of the termination of the subsequent marriage and request reinstatement within one year. If the request is not made within that window, SBP coverage may not be restored.
If the former spouse remarries at or after age fifty-five, the SBP coverage continues unaffected by the remarriage. The SBP annuity will be paid to the former spouse regardless of their marital status.
These rules are established under federal law and apply regardless of what the divorce decree says. A divorce decree cannot guarantee SBP payments to a former spouse who remarries before age fifty-five. Understanding these rules is important for former spouses who are planning their post-divorce financial lives, particularly if they are relatively young and anticipate the possibility of remarrying.
SBP Coverage for Children in a Military Divorce
The SBP can also provide coverage for children in a military divorce, either as the primary beneficiary or in combination with former spouse coverage. Child-only SBP coverage pays benefits to the service member’s children until they reach a specified age, generally eighteen or twenty-three if in school.
Former spouse and child coverage can be combined, but the mechanics are specific. The base amount for the combined coverage cannot exceed the total retirement pay, and the premium cost is higher than for either category alone. In a divorce with minor children, considering whether child SBP coverage should be part of the overall plan is worth discussing with a Florida military divorce attorney.
For most military divorces where the primary concern is protecting the former spouse’s income stream after the service member’s death, former spouse SBP coverage is the central focus. Child coverage may be relevant in cases where the children are young, where the former spouse’s SBP benefit would be inadequate to support the children after the service member’s death, or where other circumstances make it appropriate.
What Former Spouses Should Do If SBP Was Not Addressed in Their Divorce
For former spouses who are already divorced and whose divorce decree did not address the SBP, the options depend on how much time has passed and what the current circumstances are.
If the divorce was finalized less than one year ago, there may still be time to submit a deemed election request to DFAS. The former spouse should contact DFAS immediately and consult with a Florida military divorce attorney to determine whether the one-year window is still open and what paperwork is required.
If the one-year window has passed, the options are more limited. In some circumstances, parties can return to court to seek a modification of the decree that addresses the SBP, but DFAS will not honor a new SBP election ordered after the one-year window has closed unless the service member has not yet retired. If the service member has not yet retired and the parties are still within a period when retirement is not imminent, there may be mechanisms available to address the gap.
If the service member has already retired and the one-year window has passed, the former spouse’s eligibility for SBP coverage is generally lost. This is the outcome that better legal planning at the time of the divorce would have prevented. For former spouses in this situation, understanding what other financial protections may be available, including life insurance, is important.
A Tampa military divorce lawyer who is asked to help with a post-divorce SBP issue will assess the specific timeline and circumstances, advise on what options remain available, and help the former spouse understand what their realistic options are going forward.
Frequently Asked Questions
What is the difference between the SBP and life insurance in a military divorce?
Both the SBP and life insurance can provide income protection for a former spouse after the service member’s death, but they work differently. The SBP is a government-subsidized annuity that pays a monthly benefit for the former spouse’s lifetime, adjusted for inflation. Life insurance pays a lump sum upon the insured’s death. The SBP’s value comes from its inflation-adjusted lifetime payments and its relatively low cost compared to commercial annuities. Life insurance provides flexibility in how the proceeds are used and may be preferable in some situations. Many financial planners who work with military families recommend considering both rather than treating them as substitutes for each other.
Can a court order the service member to maintain SBP coverage after the divorce?
Yes. A divorce decree or court order can specifically require the service member to elect SBP coverage for the former spouse and to maintain that coverage. If the service member fails to comply with the court order, the former spouse can submit a deemed election request to DFAS, which can implement the coverage without the service member’s direct participation. The deemed election process is specifically designed to protect former spouses whose service members do not voluntarily comply with court-ordered SBP elections.
What happens to my SBP benefit if my former spouse remarries?
If you are a designated SBP beneficiary and your former spouse remarries before age fifty-five, your SBP benefit is suspended during that marriage. If that marriage ends, you can apply to have your coverage reinstated within one year of the marriage’s termination. If your former spouse remarries at or after age fifty-five, your SBP benefit continues unaffected by the remarriage. These federal rules apply regardless of what your divorce decree says about the SBP.
If my former spouse dies before I do, do I still owe SBP premiums?
No. SBP premiums are paid from the service member’s retirement pay as long as the coverage is in effect. If the former spouse beneficiary dies before the service member, the SBP coverage for the former spouse terminates and the premium is no longer deducted. The service member’s net retirement pay increases accordingly. If the service member subsequently remarries, they may be able to elect SBP coverage for the new spouse, subject to the enrollment rules for current spouses.
How is the SBP base amount determined, and can it be negotiated in a divorce?
The SBP base amount is the amount of retired pay on which the SBP benefit and premiums are calculated. The maximum base amount is the full amount of the service member’s disposable retired pay. The parties can negotiate a lower base amount, which reduces both the premium cost and the benefit paid to the former spouse. Whether a reduced base amount makes sense depends on the financial analysis of the specific case. A military divorce lawyer in Tampa structuring an SBP provision will discuss the base amount options with the client and recommend an approach that reflects the overall financial settlement.
What is a deemed election and how does it protect me if my former spouse does not comply with the court order?
A deemed election is a mechanism under federal law that allows DFAS to implement SBP coverage for a former spouse even if the service member has not voluntarily submitted the election paperwork. To use this mechanism, the former spouse must submit a written request to DFAS along with a copy of the court order requiring SBP coverage, within one year of the divorce. DFAS will then treat the election as having been made by the service member and will implement the coverage. The deemed election process is an important protection for former spouses whose service members do not comply with court orders, but it must be initiated within the one-year window to be effective.
Does the elimination of the SBP-DIC offset affect my existing divorce decree?
The elimination of the SBP-DIC offset, which became fully effective in January 2023, means that former spouses who are SBP beneficiaries can now receive both the full SBP annuity and Dependency and Indemnity Compensation without any reduction. If your existing divorce decree established SBP coverage for you and your former spouse has a service-connected disability that could result in a service-connected death, the elimination of the offset may significantly increase the total benefit you receive compared to what was available when your decree was entered. No modification of your decree is required to take advantage of this change. A Florida military divorce attorney can explain how the change affects your specific situation.
The Survivor Benefit Plan is not a detail that can be addressed after the other issues in a military divorce are resolved. It is a foundational part of the financial settlement that needs to be addressed deliberately, with specific language in the decree, tracking of the election deadline, and follow-through with DFAS after the divorce is finalized. For military families in the Tampa Bay area, working with a Tampa military divorce lawyer who understands SBP mechanics in detail is the most reliable way to ensure that a former spouse’s income protection does not disappear on the day the service member dies.
Written by Damien McKinney, Founding Partner
Damien McKinney is the Founding Partner of The McKinney Law Group Family & Divorce Lawyers, bringing nearly two decades of experience to complex marital and family law matters. He is licensed in both Florida and North Carolina and has been repeatedly recognized as a Rising Star by Super Lawyers.