Survivor Benefit Plan (SBP) After Divorce — Complete Guide

What Is the Survivor Benefit Plan (SBP)?

The Survivor Benefit Plan (SBP) is an annuity that provides continuing income to a surviving beneficiary after a military retiree's death. In the context of divorce, SBP is critical because pension payments stop at the retiree's death — without SBP, the former spouse loses all income from the divided pension.

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Why SBP Matters in Divorce

Under USFSPA, a former spouse may receive a portion of military retired pay. But those payments terminate at the retiree's death. SBP is the only way to ensure continued income for the former spouse.

The core issue

Without SBP coverage, a former spouse could lose their entire pension income if the retiree dies first. This is especially significant when the retiree is older or in poor health.

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SBP Election After Divorce

Automatic full coverage (unless spouse agrees otherwise)

During marriage, SBP provides up to 55% of the service member's gross retired pay to the surviving spouse. Spousal consent is required to elect less than full coverage.

After divorce — former spouse coverage

After divorce, the former spouse can be designated as the SBP beneficiary. There are two ways:

1. Voluntary election — The retiree elects former spouse coverage within one year of the divorce decree.
2. Court-ordered election — The divorce decree or court order requires SBP coverage for the former spouse.

Deadline

The election must be made within one year of the divorce decree. Missing this deadline is catastrophic — the former spouse permanently loses SBP eligibility.

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SBP Coverage Levels

SBP can be elected at different coverage levels:

• Full coverage — Up to 55% of the retiree's gross retired pay
• Reduced coverage — A percentage less than full (with spousal/former spousal consent)
• No coverage — Only with notarized consent from the former spouse

Cost

SBP premiums are 6.5% of the covered amount of gross retired pay. This is deducted from the retiree's pay.

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SBP Example

Scenario: A retiree receives $4,000/month in retired pay. The former spouse is awarded 50% ($2,000/month). SBP is elected at full coverage.

While the retiree is alive

• Retiree receives: $4,000 - $260 (SBP premium at 6.5% of $4,000) = $3,740
• Former spouse receives: $2,000/month (their share of disposable retired pay)

After the retiree's death

• Former spouse receives: 55% × $4,000 = $2,200/month for life
• Without SBP: former spouse receives $0

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SBP Premium Refund

If the former spouse dies before the retiree, SBP premiums paid for former spouse coverage are refunded to the retiree — but only the retiree's share, not the former spouse's court-ordered share.

If the retiree remarries and the former spouse is still living, coverage continues for the former spouse (it does not automatically transfer to the new spouse).

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Former Spouse SBP Eligibility

To be eligible for former spouse SBP, the individual must:

1. Have been married to the retiree for at least one year, OR
2. Have a child with the retiree

Additionally, direct SBP payments from DFAS require the 10/10 rule (10 years of marriage overlapping 10 years of service).

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Common SBP Mistakes in Divorce

1. Missing the one-year deadline — Permanently forfeits former spouse SBP.
2. Not addressing SBP in the decree — Leaves it to the retiree's discretion.
3. Forgetting SBP in settlement valuation — SBP has significant present value.
4. Not considering the retiree's health — If the retiree is in poor health, SBP is even more critical.
5. Assuming the new spouse replaces the former spouse — Coverage continues for the former spouse if elected.

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Frequently Asked Questions

Can my former spouse get SBP if we weren't married for 10 years?

Yes, the retiree can voluntarily elect former spouse coverage. However, direct DFAS payments require the 10/10 rule.

How much does SBP cost?

SBP premiums are 6.5% of the covered amount of gross retired pay.

Can I cancel SBP later?

After the initial enrollment, SBP can only be canceled during an open enrollment period (rare) or with the agreement of the beneficiary.

What happens if the former spouse remarries?

Former spouse SBP coverage continues even if the former spouse remarries. (This changed in recent years — former spouses no longer lose SBP upon remarriage.)

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Next Steps

1. Take the Free Assessment — Our AI-powered Veteran Divorce Financial Assessment includes SBP analysis.
2. Schedule a Strategy Session — Discuss SBP election strategy with a veteran divorce financial strategist.
3. Financial Blueprint — Get a comprehensive analysis of SBP's value in your settlement.

Protect Your Benefits. Protect Your Retirement. Protect Your Next Chapter.

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Disclaimer: This article is for educational purposes only and does not constitute legal or tax advice. Consult a qualified attorney and financial professional regarding your specific circumstances.