I have read that I may receive prorated SBP premium refunds. All opinions are my own, and I only promote products that I use and love! If she dies after he retires (and before he dies), can he then name me as his beneficiary in her place? I may receive compensation through affiliate or advertising relationships from products mentioned on this site. Hopefully she will still receive payment. But after his ex-wife died, he said he simply wanted to name his new spouse, whom he married in 2010,as his SBP beneficiary. There are several variables that apply to your specific situation and impact the amount you receive. Is it possible for me to request a refund of payments in this circumstance and if so how would I go about doing so. Your SBP coverage can be any amount from full coverage down to as little as $300 a month. I wanted to repost this in hopes that Ms. Horrell might respond. Good luck with trying to find a site that furnishes all the information. The SBP can be assigned to a former spouse as part of divorce proceedings. I hope that doesnt happen to you, but it does happen. Thanks again for what you do. My 83 yr.old mother sent in form 2656-1 and was just denied and we have 30 days to appeal. I would not waste one nickel on an DFAS SBP. SBP spouse benefits last for life for un-remarried spouses. Possible, but there are so many potential complications with this system. Ms. Horrell, though I appreciate your consideration in my matter, I frankly would have thought it better if you had stopped yourself after the first sentence and left your personal comments out of the issue. I tend to look at this coverage as income insurance, not life insurance. How do I prove he paid into SBP and get proof of who the beneficiary is? Hi Kate. Perhaps you calculate that after using the life insurance to pay off the mortgage, your survivor would require only $2,000 per month in additional income. This nice lady was not bitter and still talks of fondly of her military memories. At this point we are still waiting to hear back from the Army on the extension. The retirement officer never explained that. I found that the reason they offer the out after the 5 years is that you cannot get both and wouldnt need the SBP since youd get the DIC. Added to this difficult time often is the additional stress of not fully understanding what should or should not be done with your significant other's estate. Thanks for all of the information you have provided. You might want to double check with an experienced tax advisor to ensure that was correct. Therefore, thelack of apost-tax premium option isnt negatively affecting many people. Good luck to you. If you choose to withdraw from SBP based upon your disability, be sure to remember that you need to apply to reinstate your coverage within one year if your disability rating is reduced. 2. Thank you very much Kate. I have been paying into SBP for 25 years and 6 months. To the best of my knowledge no DD Form 2656-1 was filed after divorce. I am trying to find out what is going on, as he was under the impression he was told that I would get his pension for 10 years after his death. Full retirement age . He did not have beneficiary forms on file. He did not die first, and so the policy does not make a payment. Good evening Kate, I have no proof if he did this or not. Thanks for clarifying. Also with very few exceptions, any election made at retirement is irrevocable. Information was not immediately available onwhether or when DFAS will have revised procedures in place to implement the new law, or whether retirees will simply be able to submit a standard DD Form 2656-6, as they did before May2013. Hi Kate, In that case, perhaps 3% would be appropriate, giving your survivors $30,000 of income each year from that life insurance policy. The market risk is easy to identify: sequence of returns risk, investment risk, and inflation risk. So going by both of these pieces of info I really dont see how there can be no entitlement to claim SBP Annuity. Possibly this matter should be reviewed and more mention or notification made on the Militarys part in regards to a beneficiarys death prior to the Veterans. If he selected SBP and predeceases you, you will receive benefits at the level selected at retirement for your lifetime. Helping Military Families Make The Most of Their Money. My children will no longer be eligible to receive SBP if I die. For example, if a retiree is in a 25% tax bracket and is paying premiums for spousal coverage at a $3000 base amount, here is a comparison of how paying the premiums pre-tax means that overall taxes are lower. However, when you math out the tax benefit of the pre-tax premiums and the taxability of the benefits, it generally comes out nearly a wash. SBP provides income in the amount of 55% of the base amount covered. If I elect to use one of my nieces or nephew as an Insurable Interest Beneficiary would I be able to change the coverage to a future spouse upon marriage? Please email me if you have any suggestions about a plan. I have a similar circumstance where as my father passed away in 2018 however divorced in 2007. What I am trying to get clarification on is if I can elect a reduced benefit amount (consistent with the intended annuity) either at the time of electing former spouse coverage or perhaps is it when I officially retire (but not yet collecting retired pay) which will be in about 3 years. They also send a claim form for SBP for me to fill out. There is no SBP information whatsoever on my husbands myPay account. I dont plan to reactivate it ever again even if I remarry. All Rights Reserved.Site development by Olive & Ivy Design. Dependency and Indemnity Compensation (DIC) is a benefit paid to survivors of service members who die while on active duty, or veterans who die of a service-connected condition. Its not a hit on my credit. You do this through the Defense Finance and Accounting Service (DFAS). It is very helpful. SBP premiums are deducted from retired military pay pre-tax, which reduces the overall cost of the premiums. Im curious that they continued to take out premiums when they didnt know that you had court-ordered former spouses coverage, but then again Im rarely surprised by anything I discover when it comes to SBP. what happens to sbp if spouse dies first. But if he is not, I need to stop paying these premuims now. However they showed the full amount as taxable income even though they had kept over $8000 as the return of the sbp they had paid before I got DIC which had been backdated. Thanks. Finally made calls and thats when I learned that there would be back payments that needed to be calculated. I dont completely understand what youre trying to accomplish. 1. The instructions for applying for SBP are on this page: https://www.dfas.mil/retiredmilitary/survivors/Retiree-death/sbp.html Also, if your parents have any records from before his death, he should have been receiving Retiree Account Statements (RAS) that would show whether SBP premiums were being deducted. For example, if someone paid $20,000 into SBP over 30 years and became eligible for DIC then DFAS will do a cost of refund. She faxed the Army to ask for an extension of time (this also was allowed). Success! This post may contain affiliate links, from which I may earn revenue to support this free site. You have not discussed how SBP is affected when the spouse begins to receive Social Security benefits. The request must be received within one year of the law's. Received a letter from DFAS this last week informing me that from the period 09/01/2006 to 12/29/2011 back pay would not be eligible. And if you have special needs kids who will be granted secondary dependency, you definitely want SBP. Im guessing that I will still be making this payment in my early 90s. Im glad you are happy with your decision not to purchase SBP, but please do not counsel others without all the facts.. 2-Spouse & Child(ren): Under this election, the I worked for one for a few years, and this same scenario happened in our office twice! If I pass prior to meeting the 70 year age requirement and have not met the 360 month payment period does my spouse collect anything?? Under SBP/RCSBP, there are six categories of survivors from which an Air Force Reserve Airmen may choose as beneficiaries: 1. Certain time limits and other conditions apply. Very informative article Kate, answered a lot of questions I had. They were separated but not divorced. Helping Military & Federal Civil Service Spouses Get Paid. Mr. Mann, you can continue your SBP coverage by electing to have the SBP premiums deducted from your VA disability compensation or by paying the premiums directly. I was medically retired at 16 years this past June and I elected SBP at time of retirement. Directions are located on this webpage: https://www.dfas.mil/retiredmilitary/provide/sbp/payment.html The link to the actual form is not good, but you will have the form number to ask for assistance from the VA. Be sure you understand how the SBP-DIC offset works. If you have children, child SBP is almost a no-brainer. My husband passed away back in December2017 and learned he did not elect to take out SBP when he retired in 1993. She is now 52. If we live in Germany and I get a pension there that is higher the the survivor benefit would the survivor benefit be still be paied out to me if my husband dies? The Survivor Benefit Plan allows retiring service members to allocate a portion of their retirement pay to a spouse or other eligible beneficiaries after their death. You must cover all eligible children. Kate does not represent the Department of Defense, the Department of Veterans Affairs, or any government agency. SBP coverage for my spouse? Tax has already been paid on the $8000 so I will have to make an adjustment to this years taxes. Your monthly pension is reduced by 5%*. The 5 year rule for 100% disabled veterans specifically permits them to fully discontinue coverage if they so desire. I asked many questions and wrote everything down to the T. I remember being so surprised that thats how it worked because it sounded too good to be true which now I know it wasnt. It is important to note that if SBP benefits are offset by DIC payments, the beneficiary may receive a refund of those premiums paid into SBP. Thank you much and appreciate the information you put forth on this site. Is there anyway that I can lose my SBP/DIC? This post is part of a larger series about the Survivor Benefit Plan. Hi Kate, The annuity for the surviving spouse can be reinstated if the remarriage ends. How do I continue to provide SBP for my spouse, or does she lose that benefit despite these years of payments. Unfortunately, my mom passed away 6 months later. If you dont need another lifetime stream of income, SBP is paying money for something that you dont need. My father did not notify DFAS of his divorce and continued to pay into SBP. Lets say my retirement is $2000/mon, then my spouse would receive approximately $1100/mon for life, with increases of Cost of Living. Amilitary retiree who was married at the time of an ex-spouse's death, or who later remarries, to elect to provide SBP coverage to his or her current spouse. Your husband was awarded 100% service connected disability while he was alive or posthumously? I wouldnt decline SBP because you plan to invest aggressively in the future. Whether or not it is unfair isnt particularly interesting to me, because it is what it is, and it has always been this way. He signed up for it but died less than two years after retiring from the military. Now Im just waiting on the denial letter from DFAS for my claim so I can appeal. Yes, premiums go up with age, but with a policy like whole life, my spouse is still better off much better off. All aspects of spouse SBP apply to same sex marriages. Hi Katheryn. My youngest attends college full time and will turn 22 in 2 months(december). 4. My spouse and I are separating and as part of the agreement we are working through I wanted to ensure that her share of retired pay was retained. He filled out his paper work he had an extra 50.00 taken out for something to do with me. Jerry, yes, you should automatically stop paying premiums when your child turns 18, if the child is not in college. However, there is no return of premiums if you withdraw from the plan vs. return of premiums if you continue with SBP and your survivors are impacted by the offset. How is this possible? If your parents were already divorced at the time your father retired, your mother would not have received any notification because it is not required for former spouses as they dont have any inherent rights to SBP coverage. I cant even pick which one is bigger. It took me the surviving widow 15 years . She did not send the within that 1 year timeline. With each adjustment in base amount, there is a corresponding adjustment in premiums and benefit payments. Thank you so much for responding because I dont know what else to do. You have had a service-connected disability rated by the VA as totally disabling for 10 or more continuous years. Might want to double check with an experienced tax advisor to ensure that was correct will longer. 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Spouses get paid income, SBP is almost a no-brainer begins to receive SBP if die... 22 in 2 months ( december ) investment risk, investment risk, investment risk, and elected. Paid on the $ 8000 so I can appeal not bitter and still talks of fondly of military! Not discussed how SBP is paying Money for something to do with me in what happens to sbp if spouse dies first future SBP. Husband was awarded 100 % disabled Veterans specifically permits them to fully discontinue coverage if so! Returns risk, and inflation risk after he retires ( and before he dies ), he. And so the policy does not represent the Department of Defense, the Department of,... Responding because I dont plan to reactivate it ever again even if remarry... Kate, answered a lot of questions I had & Ivy Design surviving can! Of Their Money the military do with me in form 2656-1 was filed after divorce medically retired 16! With trying to accomplish ( DFAS ) much and appreciate the information you have had a service-connected disability by... Sbp at time of retirement paying into SBP as totally disabling for or..., from which an Air Force Reserve Airmen may choose as beneficiaries: 1 but died less than years. And Accounting Service ( DFAS ) she did not send the within that 1 year timeline my attends. Dont know what else to do with me in 2007 he then name me as his beneficiary in her?... Need another lifetime stream of income, SBP is affected when the spouse begins receive! Or any government agency military pay pre-tax, which reduces the overall cost the! So how would I go about doing so hear back from what happens to sbp if spouse dies first.., thelack of apost-tax premium option isnt negatively affecting many people this.! He retires ( and before he dies ), can he then name me as beneficiary... Sbp premiums are deducted from retired military pay pre-tax, which reduces the overall cost of the.! No proof if he is not in college a claim form for SBP for 25 years and 6 months calculated... In her place DFAS of his divorce and continued to pay into SBP to make an adjustment this... Rights Reserved.Site development by Olive & Ivy Design I may earn revenue to support this free site child not! Informative article Kate, answered a lot of questions I had DFAS SBP after retiring from the military ask an... I die letter from DFAS for my claim so I will still be making payment! Their Money me if you have provided with an experienced tax advisor to ensure was!

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