(This article originally appeared in the September 2024 issue of Military Officer, a magazine available to all MOAA Premium and Life members. Learn more about the magazine here; learn more about joining MOAA here.)

While divorce is essentially a civilian matter, the division of marital property and associated benefits can be more complicated when military retirement pay is involved. The Survivor Benefit Plan (SBP) is often a key part of a family’s estate plan. As such, what happens to SBP in a divorce needs to be carefully considered.

Military retirement pay ends with the death of the retiree. If coverage is elected, SBP provides a portion of the military member’s retired pay to eligible survivors following the member’s death. One category of SBP beneficiaries is former spouse, or former spouse and children.

Under SBP rules, former spouses are eligible to be designated as beneficiaries. While spouse SBP coverage ends with the divorce, the former spouse SBP option can continue to be an important part of an estate plan.

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This is often negotiated in conjunction with the division of military retirement pay between the retiree and the former spouse. Former spouse SBP can be voluntary or court-ordered as part of the divorce decree or other settlement document. In the same way that spouse SBP provides income to a surviving spouse, former spouse SBP provides income to a surviving former spouse.

Coverage Must Be Selected

Former spouse SBP coverage is not automatic upon the end of the marriage. The coverage must be elected using DD Form 2656-1, Survivor Benefit Plan (SBP) Election Statement for Former Spouse Coverage. This form must be filed within one year of the divorce decree or similar court order.

There is also a process — called deemed election — for the former spouse to submit the court order to the Defense Finance and Accounting Service (DFAS). Deemed election also has a one-year filing requirement.

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Failing to file the proper paperwork to elect former spouse coverage means that there is no coverage. This is true whether the election is part of a court order, written agreement, or voluntary coverage.

Once former spouse SBP is elected, SBP premiums are deducted from the military retirement pay of the servicemember. Actual fiscal responsibility for these payments can be negotiated as part of the settlement.

A court’s order for SBP coverage must be clearly articulated in the divorce decree. Couples negotiating former spouse SBP coverage must ensure their legal team or the court has access to samples and instructions to be sure the court order uses language that is acceptable to DFAS.

Only one spouse or former spouse can be covered by SBP. Changes can be made in very specific situations. If a former spouse is covered by SBP, then other estate planning arrangements will need to be made for any subsequent spouse.

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If former spouse and child coverage is elected, only the children of that marriage are covered. If (current) spouse and child coverage is elected, all eligible children are covered. Again, if former spouse coverage is elected, other plans will need to be made for children of other relationships.