When a couple gets divorced, the spouses’ retirement assets and benefits may qualify as marital property subject to division. When one spouse serves in the military, they may receive military retirement pay. Dividing this retirement benefit may implicate parties’ rights under the Survivor Benefit Plan. However, what happens to spouses’ rights under the Survivor Benefit Plan (SBP) when dividing property in a military divorce? Understanding elections under the SBP in a military divorce can help you protect your rights or options, whether you served in the military or divorce a spouse who served.
What Is the Survivor Benefit Plan?
Although military retired pay typically ends upon a veteran’s death, the Survivor Benefit Plan allows veterans to provide a lifetime annuity to their dependents after their death. This annuity provides a percentage of the veteran’s military retirement pay. Veterans pay premiums from their retirement pay to obtain SBP coverage. Spouses may receive up to 55 percent of a veteran’s retired pay, and eligible children may receive up to 55 percent, although veterans may elect a lower percentage.
When a veteran gets divorced, they must elect to transfer SBP rights to their former spouse within the later of (i) their retirement date or (ii) one year after the final divorce decree. A former spouse may also submit a “deemed election” within one year of the parties’ divorce if the final divorce decree ordered the veteran to elect former-spouse coverage under their SBP.
SBP and Divorce: Key Legal Considerations
When a veteran who elected SBP coverage at retirement gets divorced, the other spouse’s SBP rights end upon the parties’ divorce. However, the veteran can elect to convert the SBP to former spouse coverage (or the former spouse may notify DFAS of a court order requiring the election of former spouse coverage) to reinstate coverage.
Parties may negotiate a former spouse election for SBP as part of a divorce settlement. Alternatively, a court presiding over the couple’s divorce may order a veteran to make a former spouse election for their SBP coverage as part of the property division determination in the divorce case. However, veterans negotiating or litigating a former spouse election should bear in mind that electing former spouse coverage for SBP typically precludes coverage for the veteran’s new spouse should they remarry.
Common Challenges and Mistakes
Some of the top issues or oversights that may involve SBP coverage in divorce cases include:
- Failing to clearly address SBP elections in the divorce settlement or decree, which may lead to disagreements over a veteran’s obligation to make an election
- Missing the one-year filing deadline, which applies to a former spouse’s right to file a deemed election based on a court order
- Agreeing to make a former spouse election without considering the effect on the rights of a future spouse
- Assuming that coverage transfers automatically with a court-ordered division of retirement pay
- Failing to address which party will bear the cost of the SBP
Protecting Your Rights and Benefits
Parties negotiating or litigating the division of military retired pay should work with a knowledgeable military divorce lawyer who can advise you of your rights and obligations under federal laws and regulations. You can also protect your rights by reviewing all applicable military and retirement benefit documents to ensure that your current retirement benefits match court orders in your divorce case.
Contact a Military Family Attorney Today
Financial rights under the Survivor Benefit Plan can become a complex issue in a military divorce. As a result, hiring experienced legal counsel can help you secure critical benefits. Contact Patriots Law Group today for a confidential consultation with a military family lawyer to learn more about your rights and options under the Survivor Benefit Plan when you get divorced.
Legal Disclaimer: The information provided in this blog is offered for general educational purposes only and should not be construed as legal advice or a substitute for consulting with a licensed attorney. No attorney–client relationship is formed by accessing or using this content. You should not act or refrain from acting based on this information without seeking individualized legal counsel.