With Memorial Day coming up, 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 their estate plan.
Military families may face 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.
Whether you are just starting in the military or you are a seasoned veteran, below are some common factors to consider for your estate planning needs.
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.
There are many benefits offered to military 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.
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.
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 servicemembers 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. When you are examining any financial services or insurance product, it’s a good idea to work with experienced advisors to make sure any beneficiary designations work the way you expect and provide the maximum benefit to your family.
Members of the military often experience frequent moves, have access government benefits after service, and can be subject to some unusual tax rules. For these reasons, estate planning for military 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;
- Life insurance;
- Estate taxes;
- Survivor benefits; and
- Estate administration and/or probate.