Although Memorial Day just passed, it is important to honor those that have served our country. This time is also a good opportunity for members of the military and their loved ones to consider setting up an – or revising an existing – estate plan. Military families need to consider special estate-planning issues that others do not. This is particularly true when one or more family members are deployed overseas. Beyond this, members of the military have access to special benefits and resources through the Department of Veteran Affairs once they separate form service. This can become complicated and, for this reason, it is important that you seek special help if you are a military family.
Whether you are just starting in the military, you are a veteran, or you are a surviving spouse, below are some common factors to consider for your estate planning needs.
Factors to Consider
Everyone’s estate plan should be customized to the person’s particular circumstances. Some factors that should be considered include whether:
- You own real property and, if so, if the real estate is located in different states;
- You are married;
- You have minor children, or children with special needs;
- You have money set aside in 401(k), IRAs, or thrift savings plans;
- You plan to give to charity; and
- You are moving multiple times across states or to different countries.
Estate Planning Necessities
There are many benefits offered to military and veteran families that can help with estate planning. These include:
Life insurance – an important part of an estate plan and intended for those who are financially dependent upon you, life insurance is especially important if a member of the military is heading out to a combat zone. Active-duty members have access to low-cost life insurance for themselves and loved ones from Service Members’ Life Insurance Group. More information can be found on the Department of Veterans Affairs website. When examining your life insurance, work with us to make sure that the beneficiary designation works the way you expect it to.
Wills and Trusts – a last will and testament to whom and how you want your property distributed, names who will administer your estate and specifies who will care for a minor or special needs child. A trust, on the other hand, is a separate legal entity that can hold property and assets for the benefit of one or more people or entities. For most families, a trust-centered estate plan is a better fit, but a will can work for some families.
Veteran Benefits – once a service-member separates from the military, he or she is eligible for a number of services and benefits through the Department of Veteran Affairs ranging from education to healthcare to financial compensation for service-connected injuries and illnesses to financial assistance to defray the increasing costs of extended personal and/or medical care that comes with aging or other non-service related illnesses.
This last benefit is known as “VA Pension” of which has three levels, with the most commonly known one being “Aid and Attendance.” Do not let the name fool you, as “VA Pension” is not related to retirement and does not have a length of service requirement or that the veteran had made a career in the military. Of course, there are eligibility rules (which recently changed; watch here to learn more), but it is a benefit available to a majority of veterans and their surviving spouses. Many are eligible without realizing it or have been told incorrectly that they have too much income or assets to qualify.
In addition, states like California support veterans and their families with additional financial benefits such as tuition assistance for children attending college at any school University of California or California State University system. There are also a number of other collateral benefits for veterans and their families such as property tax exemptions for disabled veterans and preferred mortgage rates for home purchases and refinances through the VA home loan program.
For a complete overview of the benefits available to California veterans and their families, visit the CalVet website here.
Other benefits for survivors – survivor benefit plans (SBP) are pension-type plans in the form of an annuity that will pay your surviving spouse and children a monthly benefit. Likewise, dependency and indemnity compensation (D&IC) provides a monthly benefit to eligible survivors of service-members or veterans (1) who die while on active duty, (2) whose death is due to a service-related disease or injury or (3) who are receiving or entitled to receive VA compensation for service-related disability and are totally disabled. Lastly, surviving spouses who are 65-years old or older may be eligible for a portion of the VA Pension benefits described above even if their spouse was not receiving them at the time they died.
You Need Special Help
Members of the military often experience frequent moves, have access to lots of government benefits after service, and can be subject to some unusual tax rules. For these reasons, estate planning for military and veteran families is more complicated than most.
You can expect an estate planning professional to assist you with setting up the following:
- Powers of attorney for limited and general financial matters, as well as health care decisions (there are very helpful when a spouse is deployed);
- Funeral and burial arrangements;
- Wills and living wills;
- Organ donation;
- Family care plans;
- Life insurance;
- Trusts;
- Estate taxes;
- VA benefits and survivor benefits; and
- Estate administration and/or probate.
An estate plan has multiple objectives: to provide for your family’s financial security, ensure your property is preserved and passed on to your beneficiaries, and determine who will manage your assets upon your death, among others. We are here to guide you through the best options available to you and your family.
