Are Survivor Benefits in Military Divorce a Waste of Money

Survivor Benefits May Not Be The Best Way to Protect Yourself

In a “military divorce case”, the retirement pension is one of the most coveted assets.  One component of the retirement pension is survivor benefits.  Often it is known simply by its acronym SBP, Survivor Benefits Plan.  Many a divorce lawyer has raised his or her voice and adamantly demand that his or her client get SBP benefits.  You see, a servicemember’s right to receive a military retirement pension terminates upon his or her death.  The SBP affords servicemembers the opportunity to purchase an annuity that pays his or her beneficiaries, a spouse or child, a defined percentage of his or her pension benefit upon his or her death.  The SBP essentially insurance policy that guarantees the beneficiary a percentage of the servicemembers retirement pay for the remainder of the beneficiary’s life.  The maximum amount a beneficiary may receive under SBP is 55% of the servicemember’s monthly retirement pay.

SBP is not automatic for any former spouse in a divorce case.  It comes with a cost.  The monthly SBP premium is expensive.  The monthly premium can be as much as 6.5% of the of the servicemember’s pre-tax gross retirement pay.  Former spouses in a divorce and equitable distribution case should be aware that the premiums for the SBP annuity reduces the retirement benefit amount that he or she receives each month.  The cost of the premiums is not borne by the servicemember alone.  Rather both parties get less than they would without the SBP.  A former spouse in a divorce needs to weigh the cost of the SBP vs. life insurance or other methods of protection.

For some spouses, the risk of getting nothing in the event of the servicemember’s death is enough to justify the reduction in their disposable share of the retirement.  However, in some cases paying the high cost of SBP makes no sense.  For example, if a former spouse remarries before she is 55, she is no longer an eligible beneficiary of the survivor benefits per 10 U.S.C. § 1450(b)(2).  In fact, in this scenario the survivor benefits may actually go to the servicemember’s new spouse.  In this case, the former spouse could be paying for the new spouse to have survivor benefits.  All because your attorney demanded the SBP protections.

Many times, a life insurance policy may be a better option.  You need to discuss your future plans with your military divorce attorney.  If you plan to remarry, tell your attorney.  If you don’t, you may be wasting money on your attorney and an expensive annuity.  That’s an expensive wedding gift for your ex and his new spouse.

The attorneys at paul | perdue attorneys can help you with military divorce or military custody in Chesterfield, Colonial Heights, Dinwiddie, Henrico, Hopewell, Petersburg, Prince George, Richmond or Sussex. Give us a call at (804) 668-5327 or email us at to schedule a consultation.

**This material is for Information Purposes ONLY and should not be construed as legal advice and does NOT create a legal relationship with Paul Perdue Attorneys PLLC.