Military families may qualify for a few benefits helpful to estate planning.
Whether they make the ultimate sacrifice or not, members of the United States military make multiple sacrifices to protect their fellow Americans.
They are subject to traumatic situations.
They miss time with family.
They have limited control over their own lives.
Although busy protecting a nation, military members should also protect their loved ones through estate planning and maximizing veteran benefits.
Members of the United States armed forces must prioritize estate planning to protect their military families.
Military members and their families have some special benefits and resources available to them.
As a result, estate planning can look a little different than the average civilian.
To best secure the financial future of their loved ones amid challenging times, veterans should understand and utilize these programs.
The Survivor Benefit Plan (SBP) is crucial to supporting military families financially.
How does it work?
When a member of the military dies, the Survivor Benefit Plan pays a monthly income to the family.
The plan is intended to replace retirement income lost due to the death.
Spouses, children, and other dependents may be eligible to receive long-term financial assistance from this program.
If a service member fails to enroll in the SBP, then the payments for military pension will stop when the military member dies.
This could leave military families without an income source.
Yikes!
Because the Survivor Benefits Plan cost is based on a small percentage of the retirement payment for the military member, it can be an affordable planning option.
Some spouses and dependents of a military service member may qualify for a VA pension.
For surviving family members who qualify as low-income, the pension plan can provide assistance.
Eligibility is determined based on the discharge status and the length of active-duty service of the service member, as well as net worth and income.
There may be additional requirements for surviving family members.
The VA has two primary pension plans for survivors of deceased military service members.
What are they?
Dependency and Indemnity Compensation (DIC).
To qualify for this benefit, the military member must have died from a condition related to service or in the line of duty.
Surviving spouses, parents, or children of these men and women are then eligible for this tax-free benefit.
Survivors Pension.
Surviving military children and spouses must be low-income, and their deceased veteran must have served during a time of war to qualify for this benefit.
For military families, these pensions provide monetary aid for daily expenses to preserve the quality of life they had before the death of their loved one.
Although government programs are key to protecting and preserving the financial future of military families, service members cannot neglect traditional estate planning.
Last Will and Testament
A last will is used to designate who inherits and how assets are distributed.
If the member of the military dies with no will, they could leave their loved ones entangled in probate and trigger unnecessary family conflict over the estate.
General Durable Power of Attorney and Living Wills
General durable powers of attorney and living wills are essential to incapacity planning.
A general durable power of attorney is used to designate a trusted person to make legal and financial decisions on behalf of the military member if he or she cannot do so.
This is particularly beneficial for members of the armed forces and their families during deployment or other times of absence from home.
After all, bills must still be paid, and property managed when serving downrange.
A living will enable military members to provide instructions regarding healthcare wishes should they become incapacitated.
Designating Beneficiaries for Life Insurance and TSP Accounts
Members of the military often have life insurance policies through the Servicemembers’ Group Life Insurance (SGLI) program.
They also often have Thrift Savings Plan (TSP) accounts.
Both of these have the option to pass immediately to heirs through beneficiary designations.
Military members protect their families best by regularly reviewing and updating these designations to ensure the proper people inherit.
Organizations like Military OneSoure and military legal (JAG) offices can provide free financial counseling and free legal assistance to military families.
These can help give some education and guidance on available benefits and estate planning legal documents needed.
Being proactive can reduce stress for loved ones in the future.
Military families can easily feel overwhelmed with navigating government benefits and estate planning.
Working with an experienced estate planning attorney who has experience with veterans and their families will be a helpful step.
The Survivor Benefit Plan helps provide long-term financial support through income for dependents of a service member who has died.
DIC and Survivor Pensions are helpful for those families under the low-income threshold.
Estate planning documents like last wills, living wills, and general durable powers of attorney allow military members to protect their loved ones and assets in the case of deployment, incapacity, or death.
This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
Reference: Military OneSource (Sept. 19, 2024) “What Is Estate Planning?”
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