Estate Planning for Veterans and Active Military Members
2023-05-15
Posted at 20:13h
in Asset Protection, Estate Planning
Estate planning is crucial for everyone, no matter how wealthy they are. But it’s especially important for veterans and active military members. Being in the military earns you unique government benefits that need protection.
A sound estate plan that includes a trust, a will, advance directives, and other legal documents can help you provide for your family if you become seriously injured or pass away. Below, we cover the basics of estate planning for veterans and military members.
Six Estate Planning Tips for Veterans and Active Military Members
1: Make a Will
If you don’t have an estate plan yet, writing a will is a good place to start. A will is an essential document that explains how you want your assets to be distributed after your death. It also allows you to name an executor who will administer your estate and a guardian to care for your children. If you pass away without a valid will, the court will distribute your assets to your next of kin and appoint a guardian for any minor children.
2: Set Up a Living Trust
A living trust is even more powerful than a will when it comes to protecting your assets. All wills have to be verified in probate court, and the process can sometimes take years, but a living trust will keep your assets out of probate.
A trust also gives you more control over when and how assets will be distributed. With a will, beneficiaries receive their inheritance in one lump sum immediately after you pass. But with a trust, you can choose to have them transferred in a series of installments. You can also place conditions on inheritance, such as graduating from college or reaching a certain age.
If you set up a trust, it’s important to also include a pour-over will in case you die suddenly. A pour-over will ensures that any assets left out of your trust will automatically transfer to the trust after your death. You can also name an executor and guardian in a pour-over will.
3: Protect Your Life Insurance and Military Benefits
Veterans and active military members can receive special benefits to help them provide for their families. For instance, the Department of Veterans Affairs offers life insurance for veterans, active service members, and their loved ones. And low-income veterans over age 65 can qualify for the Veterans Pension.
You can protect these assets for your beneficiaries by placing them in an irrevocable trust. An irrevocable trust cannot be changed or revoked, and protects the assets held within from the beneficiary’s creditors.
4: Establish Advance Directives
Estate planning isn’t only about protecting your assets after you’re gone—it’s also about protecting your well-being during your lifetime. With an advance directive such as a living will or medical power of attorney, you can plan for the possibility of sustaining a serious injury in combat, or becoming incapacitated due to illness later in life.
A living will is a type of will in which you leave specific instructions for the type of medical care you do (or do not want) if you ever become incapacitated. And a medical power of attorney is a person who will make important healthcare decisions on your behalf if you are ever unable to do so. Your medical power of attorney can also use your living will to guide their decisions.
5: Choose a Financial Power of Attorney
When you’re deployed, you may need someone to handle your financial affairs for you. A financial power of attorney is legally authorized to manage your finances on your behalf. It’s also important to appoint a financial power of attorney in case you become incapacitated. They will be able to manage your finances if you are unable.
6: Name a Guardian for Your Children
Everyone who has children under 18 should name a legal guardian, but this step is especially important for active military couples. If something should happen to both parents and there is no will that names a guardian, then the court gets to decide on a guardian instead.
Make sure to choose a guardian who would be financially, morally, and physically capable of raising your children. It’s also important to name several alternate guardians, in case your first choice is unable to fulfill the role.
Estate Planning for Arizona Veterans
If you’re a veteran, an active military member, or retired, we thank you for your service. The Phelps LaClair team is honored to assist veterans, active military members, and their families with building successful estate plans.
Whether you need to create a will, a trust, an advance directive, a power of attorney, or any other legal document, we’re here to help you find the peace of mind that estate planning can provide. Give us a call at 480-892-2488 today to schedule a free consultation.
Images used under creative commons license – commercial use (5/15/2023). Photo by George Pak on Pexels
