Family Matters

Dividing Military Benefits: What Divorcing Spouses Should Know

Surviving spousal military benefits are financial protections available to the spouse or ex-spouse of a service member. These benefits can be life‑changing, but they are also notoriously complex. What makes these benefits so complicated is the fact that each benefit has its own eligibility rules, deadlines, and long-term implications.

While there are various benefits available to military families, eligibility for many of these benefits terminates after a divorce. The Survivor Benefit Plan (SBP) is one of the few military survivor benefits a former spouse remains eligible to receive when a marriage ends. This benefit is an optional monthly sum that can be paid out to an eligible beneficiary selected by the military member.

A former spouse is not automatically entitled to a portion of the member’s retired pay or the SBP election. Instead, unless voluntarily elected by the service member, a former spouse must have been awarded a portion of a member’s military retired pay or the SBP benefit as property in their final court order or settlement agreement. The election for the SBP must also be properly submitted to the Defense Finance Accounting Service. Untimely election or improper filing could result in a permanent loss of the benefit, and if the service member is older and waived the SBP election at retirement, a former‑spouse’s coverage may be unattainable.

The SBP election is a separate benefit from the military member’s retired pay, but typically has a direct impact on the amount of the retired pay the parties will receive. Think of the retired pay and SBP election as two different awardable assets in a divorce. The military retired pay, often called the “pension,” is a standalone marital asset that can be divided in a divorce and paid out to the former spouse after the military member retires. The SBP election, by contrast, is a distinct benefit funded primarily through premiums paid by the service member and operates similarly to an annuity.

If elected, the premium for the SBP is typically deducted from the service member’s retired pay. The highest election available is 55% of the pension. The higher the percentage elected for SBP, the higher the premium and the lower the pension amount that is paid out monthly. This means that if the parties agreed to share in the monthly pension amount, there is less of the retired pay to share. However, the benefit to opting into the SBP is that it pays out after the military member passes. On the other hand, a former spouse’s share of military retired pay ends when the retiree dies. Without the SBP election, the former spouse receives nothing after the service member’s death, even if they were awarded a portion of the retired pay in the divorce. This makes the SBP a very valuable asset.

It is also important to know that the SBP election may only be claimed by one beneficiary, regardless of the number of spouses the service member had. Another important consideration is that the remarriage of an eligible former spouse before the age of 55 will impact the ex-spouse’s eligibility to collect the benefit.

Navigating the division of military assets in a divorce can feel overwhelming. Understanding how military pensions and spousal benefits work is essential for understanding the division of military assets and protecting long‑term financial security. If you are unsure about your eligibility, speak with a member of our team to discuss the best outcome for your divorce.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.