Estate Planning for Veterans & Active Military
Estate planning for veterans and active service members involves more than standard wills and documents. As a veteran or active military member, you have access to a unique set of benefits and protections that most civilian estate plans do not address.
If you do not properly account for those benefits, your family could miss out on meaningful financial support or face unnecessary complications when you pass away. A thoughtful approach to military estate planning helps ensure these benefits are protected, your wishes are carried out, and those you care about receive the support they’ll need over time.
How Military Estate Planning Differs from Civilian Estate Planning
Estate planning for veterans and military families involves factors that most civilian plans do not address. Deployment, federal benefit programs, and frequent moves across state lines all can affect how you should structure your plan.
If you are deployed or otherwise unavailable, your power of attorney and healthcare directive must remain clear, accessible, and ready for use. Without proper planning, gaps in authority or communication can create challenges at critical moments.
Military estate planning also requires proper consideration of both federal and state law. Federal law generally governs veterans’ benefits, whereas state law covers asset distribution and probate. A plan that does not account for both levels of law can lead to delays or unintended outcomes.
In addition, military families often have access to benefits through programs that are not widely understood. Identifying and integrating these benefits into your plan is an important way to maximize the full range of support available to your loved ones.
Military Survivor and Death Benefits That Affect Your Estate Plan
Military families have access to several survivor and death benefits that can provide meaningful financial support. These benefits can play a major role in estate planning for military families, but they are not always automatic and may require specific elections or applications. Understanding how they work helps ensure your family can access them when it matters most.
Dependency and Indemnity Compensation
Dependency and Indemnity Compensation, or DIC, is a tax-free monthly benefit paid by the Department of Veterans Affairs to eligible surviving spouses and dependents of service members who die from service-connected conditions.
This benefit is not automatically issued and must be applied for. Including it in your estate plan helps ensure your surviving spouse is aware of the program, understands the eligibility requirements, and is ready to take the steps needed to claim it.
The Survivor Benefit Plan
The Survivor Benefit Plan, or SBP, allows a retiring service member to elect coverage so that a surviving spouse or dependents continue to receive a portion of their retirement pay after death, often up to 55 percent. SBP is often described as a subsidized alternative to life insurance because the cost is lower than comparable civilian coverage.
Elections are typically made at retirement and are difficult to change later. A decision made at this stage can directly affect your spouse’s long-term financial stability, which makes it an important part of military estate planning.
Death Gratuity
The death gratuity is a one-time, tax-free payment of $100,000 provided to eligible survivors of active duty service members who die while on active duty or while serving in certain reserve statuses.
Payment of this benefit is determined by beneficiary designations rather than a will. Keeping those designations current is essential, especially after life changes such as marriage, divorce, or the birth of a child, so the payment reaches the intended recipient without delay.
Military Life Insurance Options Not Available to Civilians
Servicemembers’ Group Life Insurance
Servicemembers’ Group Life Insurance, or SGLI, provides up to $500,000 dollars in coverage at group rates for active duty service members. Because of its affordability and accessibility, it often serves as the starting point for military estate planning.
However, this coverage is tied to your service status and does not continue indefinitely after separation. Without a plan to replace or convert this coverage, your loved ones could face a gap in protection.
Veterans’ Group Life Insurance
Veterans’ Group Life Insurance, or VGLI, allows you to convert your Servicemembers’ Group Life Insurance after leaving active duty service.
One of its most important features is the ability to convert coverage within a limited time window without a medical exam. This feature can be especially valuable if you have a service-connected condition that would make obtaining civilian life insurance difficult or too expensive. Missing this conversion window can result in permanently losing access to this option.
Family Servicemembers’ Group Life Insurance
Family Servicemembers’ Group Life Insurance provides coverage for the spouses of active duty service members and can be an important part of protecting your household’s financial stability.
This coverage should be reviewed as part of your overall estate planning strategy, particularly during major transitions such as separation from service or retirement, when eligibility and needs may change.
VA Benefits That Affect Your Estate Plan
VA Pension and Aid and Attendance
A VA Pension is a needs-based benefit available to certain wartime veterans with limited income and assets. Meanwhile, Aid and Attendance is not a separate benefit, but an enhanced level of VA Pension available to veterans who require help with daily living activities such as bathing, dressing, or mobility.
Because these benefits are based on financial eligibility, how you own and structure your assets matters. Without proper planning, you could unintentionally exceed eligibility limits and lose access to benefits you have earned. With the right strategy, including the use of certain trusts, it may be possible to qualify for benefits while still protecting your assets for your family and supporting long-term care for veterans.
VA Disability Compensation
VA disability compensation provides tax-free monthly payments to veterans with qualifying service-connected conditions.
This benefit is not inheritable and generally ends at death. However, it still plays an important role in your overall financial picture. Coordinating this income with other assets and benefits helps ensure your estate plan reflects your full resources and provides the maximum possible support to those you care about.
Burial and Memorial Benefits
Eligible veterans may receive burial in a national cemetery at no cost, along with a headstone or marker and a burial flag.
These benefits can significantly reduce the financial burden of final expenses. Including them in your estate planning helps ensure your loved ones understand what is available and can make informed decisions during a difficult time.
Legal Protections Every Active Duty Service Member Should Know
The Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act provides protections for active duty service members against certain financial and legal actions during periods of service. These protections may include limits on foreclosure, eviction, and certain civil proceedings while you are on active duty.
While these safeguards can provide stability during deployment, they do not replace the need for a comprehensive estate plan. Coordinating these protections with your overall plan helps ensure your financial and legal matters are handled according to your wishes.
Powers of Attorney for Deployment
A durable power of attorney and a healthcare directive are essential documents for any service member. These documents allow someone you trust to make financial and medical decisions on your behalf if you are unavailable.
The Judge Advocate General’s office sometimes offers to prepare these documents at no cost to active-duty members. However, standard documents may not account for more complex situations, such as business ownership, blended families, or property in multiple states. Reviewing these documents as part of a broader estate plan helps ensure they reflect your full circumstances.
Trust Strategies Unique to Veterans and Military Families
Trust-based planning can play an important role in estate planning for veterans and military families, especially when balancing benefit eligibility with long-term asset protection. The right strategy can help you preserve access to benefits while still protecting what you want to pass on to your family.
Special Needs Trusts for Disabled Veterans
Veterans with service-connected disabilities may qualify for both VA benefits and Medicaid. These programs often have strict asset limits, which can make it difficult to maintain eligibility while still holding savings or property.
A properly structured special needs trust allows assets to be held for your benefit without counting toward those limits. Thus, you can continue to receive benefits while still having the resources for additional care, support, or quality-of-life needs.
Irrevocable Trusts for Aid and Attendance Eligibility
Aid and Attendance benefits are based in part on financial eligibility, so how your assets are owned or titled can affect your eligibility.
In some situations, veterans use trusts as part of a broader strategy to reduce countable assets while preserving resources for their family. When structured properly, a trust may help support eligibility while still allowing assets to be used for long-term care needs and future planning.
Because these rules involve strict eligibility requirements and timing considerations, estate planning must be handled carefully to ensure it aligns with VA guidelines and your overall goals.
Thrift Savings Plan and Beneficiary Designations
The Thrift Savings Plan, or TSP, is a retirement account available to military members and federal employees and is often a significant part of a service member’s financial picture.
Federal law governs these accounts, and beneficiary designations control how the funds get distributed, rather than a will. Keeping your designations current and aligned with your estate plan is essential to ensure your assets go to the intended recipient.
Coordinating Military Retirement Benefits and the Blended Retirement System
Military retirement is an important part of estate planning for veterans and active duty families. For many service members, retirement benefits represent a significant portion of long-term financial security, which makes it important to coordinate them with your overall plan.
The Blended Retirement System is the mandatory retirement plan for all U.S. service members who entered the military on or after January 1, 2018. It combines elements of a traditional pension system with the defined contributions of the Federal Thrift Savings Plan. This structure means your retirement income may come from multiple sources, each with its own rules covering distribution and beneficiary designations.
In certain situations, military retirement pay may also be treated as a property interest, particularly in divorce or for structuring long-term financial arrangements. A Retirement Benefits Court Order, or RBCO, is a specific court order covering the distribution of retirement plans in a divorce, separation, or other domestic relations proceeding.
Because these elements are governed by different rules, coordinating your retirement benefits with your estate plan helps ensure everything works together as intended.
What Every Service Member and Veteran Should Have in Place
A strong plan brings together your benefits, assets, and legal documents so everything aligns with your goals. At a minimum, a robust plan includes a will or revocable living trust, updated beneficiary designations for accounts such as SGLI, VGLI, and TSP, a durable power of attorney, and a healthcare directive. It is also important to review Survivor Benefit Plan elections and consider guidance from an estate planning attorney when your situation involves more complex planning needs.
If you have questions about estate planning, regularly reviewing your plan can help ensure it remains aligned with your wishes and goals. Reviewing your plan after major life changes, such as marriage, divorce, the birth of a child, a change in disability status, separation, or retirement, or a move to a new state, helps ensure it continues to reflect your circumstances.
Building a Plan That Reflects Your Service
Estate planning for veterans and military families requires more than a standard approach. Your plan should reflect the unique benefits, protections, and financial structures tied to your service so everything works together as intended.
Those who have served have made lasting contributions to protect our nation. At Evans & Davis, we believe your planning should reflect that same level of care and commitment by helping protect what matters most to you and your family.
Evans & Davis serves military families and veterans across the country, with offices in 22 states and licensure in 46. Call 866-708-2335 or contact us online to get support today.