The Veteran’s Administration takes seriously the sacrifices of service members and the dependents of veterans as well as survivors through different benefit programs that could be available to you and your family. This is true whether you are a veteran, surviving spouse, dependent children, or even a parent to a veteran. With so many different programs available to take advantage of the attorneys with the Law Office of Bryan Fagan wanted to share with you our thoughts on how to organize your estate planning when it comes to these subjects. We know that it is not easy to have to keep track of all these different subjects so please accept this blog post as one resource for you to utilize as far as becoming as intentional as possible about how to organize your life in this regard.
A brief overview of the different benefit programs for veterans
A survivor's pension is a monthly income-based, tax-free benefit that is payable to a surviving spouse and/or the children of a deceased veteran with wartime service. For having paid the ultimate price to serve one’s country, the Veterans Administration ensures that surviving spouses as well as their children will receive a monthly payment to supplement any other income sources which are available to that family.
Next, there is Dependency and Indemnity Compensation, or DIC for short. This is a monthly, tax-free benefit that is paid to the surviving spouse, including more payments for dependent children. The parents' DIC is paid to a surviving parent based on their financial need.
Have minor children who are interested in going to college, attending a trade school, or attending community college? Then the Dependents Educational Assistance Program could be helpful to your family. This is a benefit that can be used to help pay for a degree of some sort or to pursue different types of education and training opportunities.
Health insurance is always a major concern for many people as they encounter different needs throughout their lives. The reality that you may run into is that health savings accounts, health insurance, and things of this nature can be out of sight and out of mind for the most part until you get to a point where you need health insurance. The civilian health and medical program of the Department of Veterans Affairs is a key benefit related to this subject. It can provide reimbursement for most medical expenses for certain surviving spouses and dependents of veterans who have permanent and total service-connected disabilities but are not also eligible for Tricare.
Securing a home, it's part of everyone's American Dream. That your military service should make it simpler to obtain a home loan is common sense. The Veterans Administration does make it easier to obtain a home loan compared to non-VA loans. These hormones can be used to purchase, build, or even improve an existing home. If you are interested in refinancing your mortgage then that may be an option for you to choose from as well. However, given what home loan rates are these days versus what they were just a few years ago that probably isn't something that you are looking into right now.
On the other side of the ledger are burial benefits made available to veterans and their families. This is a benefit that includes providing a headstone, marker, or medallion as well as a burial allowance to cover those costs. The traditional American flag that can be draped over a casket is also provided. If your family would like to bury your loved one at a Veteran’s Administration cemetery then you can pursue that, as well.
What do veterans need to pay attention to when it comes to estate planning?
When you are a veteran who is living in Texas you need to have a good idea about how to understand and take advantage of the different benefits that come with being a military veteran. These are benefits that you have earned over your years of service and should be entitled to now that you are beginning to plan for retirement or your golden years. However, what is surprising is that many veterans do not understand that they are eligible for these types of benefits and may miss out on different ways to provide their families with positive experiences, security, and financial peace of mind once they have passed on.
Since you do not want to be one of these people to fail to take advantage of all the different programs made available to them, we at the Law Office of Bryan Fagan want to help you think about different considerations that are important now and in the life of your family moving forward. The estate planning attorneys with our office can help you design an estate plan that is right for you and your family. We do not do cookie-cutter estate planning. Rather, we take into consideration the needs of your family and then help you build an estate plan that is right for you all. It is not enough for us to simply do the bare minimum. Rather, we take into consideration all the different factors at play and provide you with what you need to know as you take on the challenges associated with estate planning.
The basics of estate planning for veterans
To start with, estate planning is when you prepare for the transfer of your property after your death. To facilitate this, you will create legal documents and then make choices about how your property should be distributed. For a veteran, this not only means the type of property that almost all of us own or will come to own such as bank accounts, vehicles, personal property, and a home but also benefits that are unique to military veterans. The more intentional you can be and the more planning you can put into this subject the more you can ensure that you will be remembered for being a good steward of the property that you were blessed to have during your life.
As we mentioned a moment ago, being intentional about your property is the best way to approach your estate planning. If you can think ahead and be diligent about how you work through this date planning then you will have the benefits of a great legacy for yourself. Wandering into an estate planning circumstance almost certainly means that you will not have the necessary mindset to be able to plan and that you will likely leave money on the table and other opportunities by the wayside as far as your family is concerned. This is almost certainly not what you intend to do and as a result, will end up costing your family in the long run.
With that in mind, what we see from many veterans is an assumption that their property will automatically go to their spouse and children after they pass away. This may be true when it is all said and done but you do not want to leave it up to chance. Rather, you would want to ensure that you have as much autonomy as possible over these circumstances so that you can rest assured that the people you want to wind up with your property after you pass away actually can do so. It is always a shame when unexpected events occur and the estate does not get settled in the way that the deceased person would have intended. You can also avoid unnecessary delays and costs that eat away at the value of your estate when you perform even basic types of estate planning.
What is a will?
A will is a legal document that lays out how you want your assets to be distributed once you pass away. A will covers assets and property that do not already have beneficiaries which are a part of them. Examples of property items that do not need to be distributed via a will include retirement accounts as well as life insurance policies you may have also heard about a trust which is a type of estate planning vehicle. Their trust can help your family avoid needing to go through a probate court and allows you to have a certain degree of autonomy over how your property will be distributed after you pass away. If you have a relative who has special needs, then you can use a trust to help manage property for that individual.
We talk about powers of attorney here on this blog quite a bit. This is for good reason. A power of attorney is an important legal document in estate planning for anyone, including veterans. This legal document allows another person to be able to make financial decisions on your behalf if you become incapacitated. For a veteran like yourself, this can be very important especially if you have service-connected disabilities that make it difficult for you to be able to manage your financial accounts and other matters related to retirement, for example.
If possible, it is a good idea for you to maintain as many types as possible of accounts that allow you to pass property outside of probate after you pass away. Retirement accounts like 401 K and individual retirement accounts are examples of different types of financial saving accounts that contain beneficiaries. These do not need to be probated or left in a will for anyone. The same goes for life insurance policies. Finally, you can work with your bank or credit union to make your checking and savings accounts payable on death if that is what you choose to do. For that, the recipient of the payable and death account would just need to notify the financial institution of her passing and usually provide proof of death like a death certificate. In that case, the person would simply be able to access your financial account without first having to go through probate or receive permission from a court.
How can a special needs trust positively impact your family from an estate planning perspective?
There are different means-based pension plans which are available through the Veteran’s Administration. However, as we touched on earlier in today's blog post these plans are not that helpful if you know nothing about them and do not do anything to take advantage of them. A special needs trust may receive benefits for veterans who are means-tested. This is how it would work. A special needs trust asset would belong to you if the assets were owned by you, you possess control over the property and then money has been allocated 4 your use of the property.
Veterans and estate planning: closing thoughts
To be sure, a veteran has unique factors to consider when planning their estate due to the different programs and benefits made available through the Department of Veteran’s Affairs. In addition to the programs, we have already highlighted there are life insurance and burial benefits also available. These are programs that just begin to scratch the surface of the available programs to you and your family. As a result, being as diligent and intentional as you can be when it comes to your estate planning is essential.
Figuring out how to determine eligibility for these programs and applying to each of them is not simple. There is not a one-stop shop available to you to apply to each program or to receive each benefit. Typically, they need to be done individually which increases the likelihood that errors can be made or that oversights can occur to the point where benefits are not taken advantage of where they otherwise should have been. Again, working with an experienced estate planning attorney can be the difference between you taking advantage of every benefit available to you or losing out and benefits that you otherwise would have been able to receive.
Long-term care is a potential issue for your family to consider. Any eligible veteran who also needs assistance performing activities of daily living should investigate what is known as aid and attendance benefits through the Veteran’s Administration pension program. What this benefit does is provide you with a monthly allowance to help you or a surviving spouse pay for nursing care or at-home care. Eligibility for this program is determined based on length of military service, and medical and financial criteria. Bear in mind that this is a needs-based program. Your net worth cannot be much higher than $130,000 to qualify. For you, if you are not eligible currently for this benefit then you can work with an experienced estate planning attorney to help you reduce your countable assets to become eligible in the future.
What is the three-year look back?
In recent years, a new rule has come into place which impacts veterans and their families. This is known as a three-year look-back provision which would impact you if you were applying for aid and attendance benefits. You would need to disclose any financial transaction that you have been a part of over the past three years. What the Veteran’s Administration is attempting to do is to determine whether or not you sold any asset within the past three years at a below-the-market rate to qualify for aid and attendance.
However, there is an exception to this look-back provision. Any child who is the subject of special needs trust and is unable to care for themselves does not have to undergo the same three-year look back. As another, the person would. This means that any properties of yours that are placed into the special needs child's trust do not count towards this limit.
What is the best way to create an estate plan?
As a military veteran, there may be opportunities for you to plan your estate through a resource in the military itself. While you should certainly investigate this it is not necessarily the case that these groups or resources will be able to provide you with the kind of assistance that an attorney with the Law Office of Bryan Fagan will be able to. We are fortunate to work with a great many military veterans like yourself and we are honored to be able to say that we can serve these folks.
Working with our office means that you will receive the most up-to-date knowledge of the laws in Texas on estate planning when compared to other resources which may not be as current on their knowledge. So much is at stake in estate planning and the details matter. The attorneys with the Law Office of Bryan Fagan understand this and take the responsibility seriously of working with our military veterans and clients.
Questions about the material contained in today's blog post? Please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas estate planning law as well as what may occur if a probate or guardianship case is filed in your family.