(a) Designation of Recipients.—(1) On and after July 1, 2008, or such earlier date as the Secretary of Defense may prescribe, a person covered by section 1475 or 1476 of this title may designate one or more persons to receive all or a portion of the amount payable under section 1478 of this title. The designation of a person to receive a portion of the amount shall indicate the percentage of the amount, to be specified only in 10 percent increments, that the designated person may receive. The balance of the amount of the death gratuity, if any, shall be paid in accordance with subsection (b).
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(2) If a person covered by section 1475 or 1476 of this title has a spouse, but designates a person other than the spouse to receive all or a portion of the amount payable under section 1478 of this title, the Secretary concerned shall provide notice of the designation to the spouse.
(b) Distribution of Remainder; Distribution in Absence of Designated Recipient.—If a person covered by section 1475 or 1476 of this title does not make a designation under subsection (a) or designates only a portion of the amount payable under section 1478 of this title, the amount of the death gratuity not covered by a designation shall be paid as follows:
(1) To the surviving spouse of the person, if any.
(2) If there is no surviving spouse, to any surviving children (as prescribed by subsection (d)) of the person and the descendants of any deceased children by representation.
(3) If there is none of the above, to the surviving parents (as prescribed by subsection (c)) of the person or the survivor of them.
(4) If there is none of the above, to the duly-appointed executor or administrator of the estate of the person.
(5) If there is none of the above, to other next of kin of the person entitled under the laws of domicile of the person at the time of the person’s death.
(c) Treatment of Parents.—For purposes of subsection (b)(3), parents include fathers and mothers through adoption. However, only one father and one mother may be recognized in any case, and preference shall be given to those who exercised a parental relationship on the date, or most nearly before the date, on which the decedent entered a status described in section 1475 or 1476 of this title.
(d) Treatment of Children.—Subsection (b)(2) applies, without regard to age or marital status, to—
(1) legitimate children;
(2) adopted children;
(3) stepchildren who were a part of the decedent’s household at the time of his death;
(4) illegitimate children of a female decedent; and
(5) illegitimate children of a male decedent—
(A) who have been acknowledged in writing signed by the decedent;
(B) who have been judicially determined, before the decedent’s death, to be his children;
(C) who have been otherwise proved, by evidence satisfactory to the Secretary of Veterans Affairs, to be children of the decedent; or
(D) to whose support the decedent had been judicially ordered to contribute.
(e) Effect of Death Before Receipt of Gratuity.— If a person entitled to all or a portion of a death gratuity under subsection (a) or (b) dies before the person receives the death gratuity, it shall be paid to the living survivor next in the order prescribed by subsection (b).
