Risks for military families include accidents during training, battlefield injury and the stress of frequent moves, to name a few. Service members have a far greater than average chance of becoming disabled or dying prematurely. This makes it especially important for military families to have access to financial and estate planning advice.
The Wall Street Journal article, "How to Serve Military Families," says that in many instances, military spouses are young and financially immature. Military families don't settle in one place for very long, so a non-military spouse may have trouble finding a steady job that would provide a second income and a retirement plan. In that situation, if something happens to the service member, and benefits are paid out, they need to be able to access them immediately. It's more likely that young military families will need help getting an estate plan together and updating things like beneficiary designations.
Financial and estate plans can't be static. They need to reflect a family's current life situation. For example, beneficiary designations on retirement plans need to be reviewed and updated, and many soldiers and sailors name a boot camp buddy as the beneficiary of their Servicemembers Group Life Insurance (SGLI) policy after they enlist. This needs to be changed when they've married and have had children.
Retirement and insurance plans pay named beneficiaries, separate from the will. A service member's will may provide that his or her child can't access the assets left in trust until he or she reaches age 25. However, if the child is a named beneficiary of an SGLI policy, the proceeds will be paid directly to the child if he or she is 18 or has attained the state's age of majority; or they will be paid—regardless of age—to a legal guardian who may not be the person the service member would have chosen to manage these funds for his or her child. Another way to go is to have a trust for the child be the insurance beneficiary.
Another area of concern for military families is real estate assets. If they move frequently, it is likely that they may own property in multiple states. If the service member dies, it may be difficult for the surviving spouse to manage properties, or the property may end up in probate.
This is why at Family Estate Planning Law Group, we focus on not just creating documents, but on your assets. We believe that the most important aspect of estate planning is knowing how one’s assets are owned. That almost always determines how that asset will pass after your death.
To address this, we work with you to align the ownership (or title) of your assets to align with your estate plan, then work with you on an ongoing basis to ensure that as assets, family situation and laws change, your asset ownership stays in line with your plan.
As always, make sure to speak with an estate planning attorney about your estate plan. They may be aware of planning opportunities you might overlook, so consulting with an experienced estate planning attorney familiar with working with military service members is your best bet. Serving military clients is just one way to show appreciation for the brave men and women who serve our country.
Reference: Wall Street Journal (April 19, 2016) "How to Serve Military Families"