Survivor Benefit Elections
A military pension dies when the retiree dies unless you lock in a Survivor Benefit Plan annuity during the divorce. California judges will not remind you, and DFAS will not send a courtesy email; miss the one year election window and the monthly checks stop forever.
Proper attorney guidance ensures the former spouse receives 55 percent of retired pay for life while the service member pays the lowest possible premium. Skip this step and you trade lifetime security for a single lump sum that could be gone in five years.
Timing Rules You Cannot Negotiate
- Former spouse election must be made within one year of the divorce decree
- DD 2656-1 form must be signed by the retiree and delivered to DFAS
- Remarriage before age 55 suspends the annuity but does not terminate it
We calendar the deadline the day the judge signs and send reminder notices at 30, 60, and 90 days out. Last year we saved a client $2,300 monthly by filing the form on day 362 after her ex tried to stall. Courts will extend the deadline only for fraud or mutual mistake, two arguments that cost more to litigate than the annuity is worth.
Premium Cost And Who Pays
The premium is 6.5 percent of gross retired pay, deducted before taxes, which lowers the member’s taxable income. In settlement negotiations we often shift that cost to the member in exchange for a slightly lower percentage of the pension, producing net savings for both parties. F
or example, awarding the former spouse 47 percent with the member paying the premium yields roughly the same net dollar as 50 percent with each side paying half the premium, but the member gets the tax write off.
We also draft language that caps the premium at the “base amount” elected at retirement, preventing the former spouse from chasing promotions that occur after divorce. Santa Monica judges routinely approve this clause because it follows federal law while protecting California community property rights.
Election Vs Lump Sum Buy Out
Sometimes the service member refuses to maintain SBP and offers a cash buy out instead. We calculate the present value of the annuity using life expectancy tables and a 3 percent discount rate, then adjust for taxes.
If the buy out is less than 85 percent of actuarial value, we advise clients to reject and push for the election. Courts cannot force a retiree to sign the DD 2656-1, but they can award additional property to offset the lost annuity.
Bottom line: survivor benefits are insurance, not a luxury. Bring your decree to our office and we will draft the election form, notarize it, and track DFAS confirmation so the annuity starts the moment retired pay begins and continues for the rest of your life.
