You face unique estate planning challenges as an active-duty military service member. Military families must be ready for anything at a moment’s notice, from transfer to a new city (or even country) to a dangerous deployment halfway around the world. This makes it hard to plan for the future. However, the unpredictability of military service makes it even more important to have estate planning documents in order - no matter your age or marital status.
In this article, FastWill has collected our best seven tips for ensuring that you protect yourself and your family before deployment so that they and you don’t have to worry when you are deployed.
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Start with a Will
A will is a legal document outlining how you want your assets distributed after death. Wills are governed by state law. Sometimes this seems like a barrier for people who have lived in many different states because of their military service. But you can’t let that stop you from having a will. If you have a will, tell the court exactly how you want your estate handled. Without a will, your estate will be dictated by the state laws where you happened to be living at the time you wrote the will. In short, when you have a will, you get to decide what happens. FastWill makes it easy to create a will efficiently. It's also simple to update your will through FastWill, especially compared to the time and expense of hiring an attorney.
2. Consider a Trust, including a Special Needs Trust
A trust is a legal entity that can hold and manage your assets for the benefit of your beneficiaries. Trusts are useful for military families because they can provide ongoing financial support for dependents or disabled family members. They can also protect your wishes in the event of a major life change, like a divorce or a significant debt.
A trust can also benefit you once you are no longer in the service. According to the U.S. Census, military veterans are more likely to face a disability because of their service. A special needs trust is a type of trust designed to provide financial support for people who have disabilities or special needs. In some states, this is called a “supplemental needs trust.” Like other trusts, the special needs trust is managed by someone responsible for disbursing the funds. This person is known as a trustee.
A veteran with disabilities will still receive government benefits such as VA disability compensation or Medicaid. However, if the veteran receives a traditional inheritance or gift or wins a significant amount of money, the government can disqualify the person from receiving benefits. If, however, the person puts assets in a special needs trust controlled by a trustee, these assets are *not* considered "countable" assets for the purposes of determining eligibility for government benefits.
In this way, a special needs trust can supplement your government benefits, helping you pay for additional expenses like home modifications, medical equipment, transportation, or personal care attendants.
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Review and Update Your Beneficiary Designations
As a member of the military, you likely have various accounts with beneficiary designations, including life insurance policies, retirement accounts, and certain bank or savings accounts. If anything happens to you, those accounts will be distributed according to the beneficiary you select rather than through the operation of your will or according to state law. When you sit down to write your will, make time to review your beneficiary designations and update them if your wishes change. Estate planning experts say that if you are deployed overseas, that’s a good time to review and update your designations again.
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Create a Power of Attorney
A power of attorney is a legal document that designates someone to act on your behalf if you cannot do so. This document is especially important for military personnel who may be sent overseas or deployed on long tours when they won’t be available to make financial or other family decisions. With FastWill, you can make a power of attorney that is as broad or narrow as you need it to be. For example, if you want your spouse to be able to make decisions about selling your house, you can create a POA that is limited just to the purchase and sale of real estate. If you prefer to give your spouse or someone else more general powers, you can work with FastWill to create a document right for your situation.
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Make an Advance Directive
An advance directive, also known as a living will, outlines your wishes for medical treatment if you are unable to make decisions for yourself. Every person who makes a will should have an advance directive. However, since military members are at higher risk of death or serious injury, it is prudent to consider your wishes now.
If you have a living will, it will ensure that your wishes regarding medical treatment are known and followed, even if you can’t communicate for yourself. This also takes the pressure off your family during a difficult time since most advance directives allow you to specify which procedures you want and do not want. We recommend discussing the advanced directive with your loved ones in advance so they know how to find your advance directive in the event that it is needed.
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Review Your Life Insurance Coverage
Life insurance is an essential component of estate planning for military families, and it is provided to all service members unless they opt-out. The government’s insurer is Servicemembers’ Group Life Insurance (SGLI). All personnel who are on active duty or work for the Department of Veterans Affairs, the National Guard, and the Reserve can obtain up to $500,000 of life insurance. Service members can also buy additional coverage for spouses and dependent children. Life insurance proceeds will be distributed to your named beneficiaries. You can make changes online anytime that you need to. If you’re unsure about your benefits, check with your unit’s personnel office; they can help you identify your policy.
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Write a Letter Before Deployment
Before deployment, consider creating a letter of instruction that outlines your wishes for your family's care, including anything that is important to you, such as your children’s education, medical decisions, and instructions about where to locate important documents. A letter is not a legal document, but it can help your family figure out what you want. This is another constructive way to start a conversation about the future and to make sure that everything goes smoothly while you’re gone.
