Military Estate Planning

Military Estate Planning

Being responsible for your family includes planning for their care if something were to happen to you, whether it is a debilitating injury or death. This is even more important for those in the military who face the ever-looming prospect of overseas deployments, combat or even risky training environments that can include jumping out of perfectly good airplanes. The military profession is one that is rife with hazards to life and limb, making it that much more important for service members to have an estate plan in place to protect their families. Fortunately, the military provides free legal services to those in its ranks and their family members, which includes estate planning assistance. This article will provide an overview of military estate planning services as well as their limitations.

What Does the Military Offer?

The military provides a variety of estate planning services which can include legal advice as well as the actual preparation of legal documents. Typically, you can expect a military lawyer to provide support with:
• Powers of Attorney for financial matters (limited and general) and health care decisions
• Living Wills
• Funeral and burial arrangements
• Organ donation
• Wills
• Trusts (simple)
• Family care plans
• Life insurance (SGLI)
• Survivor benefits
• Estate taxes
• Estate administration/probate (although military lawyers are unable to represent you in court)
If you’re meeting with a military lawyer, be prepared to complete forms asking about your family and assets as this helps the attorney to timely craft an estate plan that works for you.

Limitations of the Military Estate Plan

There are likely two ways in which you’ll encounter military estate planning services. You’ll either set up an appointment with your local legal assistance office or you’ll be rushing through a series of stations as part of the pre-mobilization or pre-deployment process. The round robin routine will usually include a legal station which provides estate planning support, although at a quick pace. Military lawyers, particularly those involved in preparing service members for mobilization or deployment, have limited time and resources, making it difficult to prepare more complex estate plans.

Setting up Trusts

While you can expect competent legal counsel from a military law attorney, if you have a more complex financial or family situation, using military estate planning services may not be the best solution. For example, if your assets would approach the lifetime gift tax exemption (the amount you can gift in your lifetime without having to pay taxes, which is 5.43 million as of 2015), or if you have family members with special needs, you would likely require the creation of one or more trusts to help you:
• Avoid federal or state estate taxes
• Avoid probate (by removing assets held in your name at your death)
• Provide adequate support for special needs family members while ensuring their continued eligibility for needs-based assistance.

While a military lawyer may be able to create simple trusts, he or she may not have the time or resources to create the trusts needed to address a complex financial or family situation, like those listed above. Also, given their time and resource limitations, a military lawyer would not likely be able to fund your trust by preparing the instruments needed to transfer assets out of your name and into your trust. These would include such things as:

• Property deeds and any accompanying change of ownership forms to avoid reassessments

• Forms to change account titles on bank accounts or investment accounts

• Forms to re-issue stock certificates so they are titled in your trust and not your name

All of these transfers are needed to ensure that your assets are titled in your trust and not in your individual name and all of which require follow up with a county recorder, financial institution or corporation, something a military lawyer would not likely be able to do. If you do create a trust with a military lawyer, he or she will probably direct you to transfer your assets on your own.

Other Options to Avoid Probate

If your goal is to avoid probate and you have some investments or real property, you could have a military lawyer prepare your estate plan without a trust and simply change title to your assets in a way that would avoid the probate process. For example, real property held as “joint tenancy” normally will not trigger probate as the property automatically passes to the remaining joint tenant at your death. Also, accounts that are titled as “payable on death” normally have the same effect. You can ask your military lawyer to see whether these options would work for you. No matter the time of year, it is always a good opportunity for members of the military and their loved ones to consider setting up 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. This can become complicated and, for this reason, it is important to seek special help if you are a military family. Whether you are just starting your service in the military or have been serving for some time, consider the following common factors that may be important in your estate planning.

Factors to Consider

Estate plans should be customized to each person’s particular circumstances. In your estate planning, you should consider whether:
• You own real property and, if so, if it 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 families that can help with estate planning. These include:
Life insurance – Life insurance is an important part of an estate plan intended for those who are financially dependent upon you, especially if you are facing deployment. Active-duty members have access to low-cost life insurance for themselves and their 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.

Will

A will is a crucial document outlining to whom and how you want your property distributed at your death. It also allows you to name who will administer your estate and specify who will care for minor or special needs children.

Trust

A trust is a separate legal entity that can hold property and assets for the benefit of one or more people or entities. Similar to a will, a trust allows you to dictate who will receive your property at your death and how it is to be administered. The added benefit of a trust is that it also provides instructions on how to handle the assets during any period of your incapacity. 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 at your death. Likewise, dependency and indemnity compensation (D&IC) provides a monthly benefit to eligible survivors of service members or veterans who die while on active duty, whose death is due to a service-related disease or injury, or who are receiving or entitled to receive VA compensation for a service-related disability and are totally disabled. When you are examining any financial service or insurance product, it’s a good idea to work with an estate planning attorney to make sure any beneficiary designations work the way you expect and provide the maximum benefit to your family.

You Need Special Help

Members of the military often experience frequent moves, have access to several forms of 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 in planning for the following:

• Powers of attorney for financial matters, as well as health care decisions (they 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;

• Survivor benefits; and

• Estate administration and/or probate.

Here is a brief explanation of a few different estate-planning tools.

Life Insurance

Life insurance is a tax-advantaged asset that provides the family with the financial means of maintaining their standard of living after the death of a loved one. Various types of life insurance plans are available to meet the needs of many different financial obligations that are present after death. Take a look at the military specific providers of life insurance that have designed plans around the unique needs of military members. There are a number of websites, which provide information on insurance. An excellent non-affiliated resource is the LIFE Foundation. The Life and Health Insurance Foundation for Education (LIFE) is a nonprofit organization dedicated to helping consumers make smart insurance decisions to safeguard their families’ financial futures. This is an excellent option to learn more about the different types of available life insurance plans and which type of plan would be best for you.

Military Estate Planning Trusts

Trusts are vehicles that allow you to control your assets during your lifetime and have those assets distributed upon your death according to your stated wishes. Trusts can allow for a quick transfer of assets, reduce probate costs, provide privacy in distributing your estate, and possibly reduce estate taxes. An estate planner should be contacted to help you set up a trust that best meets your needs. Even with a trust, you still need a will to cover issues such as child guardianship and distribution of any property that was not placed in a trust.

Military Estate Planning Wills

A will is a legal document that, at the time of your death, allows you to distribute any property that is not within a trust. Wills also allow you to designate guardians of minor children or other legally incompetent dependents and can create trusts to protect the interests of your beneficiaries. Your will should be reviewed periodically to ensure that it still covers all of your wishes and that changes in tax laws will not adversely affect your estate. Keep in mind that if you die without a will (called intestate), your property will not be distributed based on your wishes but rather under state law by a probate court.

Military Estate Planning Power of Attorney

A Power of Attorney allows a person of your choice to act on your behalf in handling financial matters. You can design a power of attorney to allow the other person limited or complete control over your assets. A power of attorney can be very helpful in the event you are overseas and unable to handle your financial affairs or if you become incapacitated due to illness. An estate planner can help you design a power of attorney that can best meet your needs. Take the time to review your current estate planning documents and make sure that you have everything in place to protect your family.

What Happens If a Person Dies Without a Last Will and Testament?

Those who die without completing a last will and testament are said to have died intestate and the laws of the service member’s home state dictate how the estate is to be handled. This may or may not be in accordance with the servicemember’s wishes, and it may or may not be in the best interests of the family members left behind. In no case should a service member deploy without completing a will; it is not necessarily to the family’s benefit otherwise. In fact, it may deprive your loved ones of much needed funds to deal with the immediate aftermath of the service member’s death. Remember, state law may dictate how a military member’s estate is divided even if the death occurred overseas or outside the state; the servicemember’s current state of residence may have jurisdiction, or the servicemember’s home of record as reflected in military paperwork depending on circumstances.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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