Legal Update

THE MILITARY’S SURVIVOR BENEFIT PROGRAM (SBP) is an

annuity program to provide financial support for military spouses following the death of a veteran. While the program may provide some measure of financial security, some financially savvy Veterans opt instead to buy an additional insurance policy or annuity product at a lower cost. If the Veteran is married at retirement and chooses to opt out of SBP coverage, the spouse must sign the declination and have the signature notarized.

The deadline for applying for SBP for active duty personnel is before retirement. For reserve component members the deadline is within 90 days of retirement. Failure to fill out SBP will either stall retirement pay or result in automatic full coverage for the spouse.

As a government product, the SBP involves some inherent bureaucracy. This is especially evident when a Veteran becomes divorced. Often, SBP benefits are negotiated as part of a divorce settlement. Often a court’s divorce decree addresses SBP benefits, but this is not required.

WITHIN 1 YEAR! When a Veteran becomes divorced and wants to continue the SBP for their former spouse, specific actions must occur. First, the Veteran must elect former spouse on DD Form 2656-1 and submit this form to DFAS within one year of divorce. 366 days after a divorce is final is too late and DFAS will reject the claim. Veterans should mail and fax copies to DFAS and the former spouse should retain a copy. If the Veteran has more than one former spouse the first request received by DFAS will be honored, assuming the documentation is complete.

A 2016 change to the law (contained in the 2016 National Defense Authorization Act) allows a retiree with SBP coverage for a former spouse to transfer that coverage to his/her new spouse if the former spouse dies. If a surviving spouse is entitled to SBP benefits but remarries before age 55 they are automatically ineligible to receive benefits – no matter how much the deceased Veteran paid in premiums (subtracted from their retirement checks). If the surviving spouse remarries at age 57 or older, they’re still eligible to receive a full payment.

SBP regulations are complicated and often result in wasted money and frustrated widows. Consulting a financial planner familiar with the SBP and or a Divorce Attorney experienced in the intricacies of military divorces may save you money and heartache for survivors after your gone.

NGAT Life Member Doug O’Connell is a practicing Attorney offering free consultations and discounted legal fees for NGAT members. Contact Doug at Doug@DougOConnell.com or 512-547-7265.