In this comprehensive estate planning guide for active duty and veteran military servicemembers, we review the recommended documents and strategies you need to confidently prepare for all contingencies.
BLUF: Military servicemembers need a comprehensive estate package
Military servicemembers need a comprehensive estate planning package. A comprehensive estate planning package includes three primary document sets:
- Last will or revocable living trust
- Durable financial power of attorney
- Advance health care directive (i.e., medical power of attorney and living will)
Combining these documents covers your bases while you are alive and after you pass away. The table below briefly summarizes when each document becomes effective, what it does, and some sample use cases for how it might be applied.
| Document | When Becomes Effective | What It Does | Sample Use Case |
|---|---|---|---|
| Last Will | After death | Dictates what should happen to stuff you own and people you’re responsible for | You pass away and want to provide for people you care about |
| Revocable Living Trust | During Life and After Death | Same as a last will, except the trust avoids probate thanks to how it treats your assets | You want the fastest way to pass on assets to loved ones with greatest degree of control and privacy over distributions |
| Durable Financial Power of Attorney | During life as a matter of convenience or if you lose ability to manage your own finances | Grants a trusted individual power to enter into financial transactions on your behalf | You are on deployment and need someone to look after your house or pay bills. You have a debilitating accident and are unable to handle your finances |
| Advance Healthcare Directive | During life, if you are unable to communicate your healthcare preferences | Grants a trusted individual power to make medical decisions for you and/or outlines your medical preferences in advance | You’re injured in battle or an accident and lose (even temporarily) the ability to communicate your health preferences |
Last Will for Military Servicemembers
A last will is an important legal document that allows you to specify who will handle your affairs after death, what should happen to the stuff you own, and who should care for any minor or special needs children you’re responsible for.
The person you nominate to handle your affairs after death is called your Executor or Personal Representative. Think of this person like a general manager responsible for ensuring that the instructions that you provide in your last will are realized to the fullest extent possible.
You can transfer assets to loved ones through your last will by making gifts. A specific gift designates one or more people to receive a particular asset. For example, maybe you gift your wedding ring or a real estate property to your daughter. Any probate asset that you don’t designate as a specific gift will transfer through your residuary estate, which is just a fancy word for the value of all your assets after paying all debts, taxes, and making specific gifts. For most people who make only a few or no specific gifts, the residuary estate is the largest component of estate gifts by value.
Not all assets pass through your last will, however. Your last will covers only probate assets, which are assets without a built-in beneficiary designation like a car, jewelry, real estate (in many cases), or most checking and savings accounts. Assets that do carry built-in beneficiary designations, such as an investment account or a life insurance policy, transfer directly to the beneficiary or beneficiaries listed on the account. For this reason, make sure that you review these beneficiary designations when completing or updating your last will.
If you have minor or special needs children, you’ll appoint a guardian for the children in the event that you pass away before they reach adulthood. You can choose to appoint of a “guardian of the person” and “guardian of the estate.” The guardian of the person is responsible for the day-to-day care of the child, whereas the guardian of the estate is responsible for managing any finances gifted to that child until the child reaches adulthood. In many cases, willmakers appoint the same person to be guardian of the person as guardian of the estate.
Revocable Living Trusts for Military Servicemembers
A revocable living trust shares many of the same purposes of a last will but has a few important differences.
Like a last will, you’ll appoint a trusted individual to carry out the instructions in your trust. This person, called a trustee, may serve alongside you during your life as a co-trustee and/or as a successor trustee after you pass.
You can also leave gifts for loved ones and charities through your trust. Depending on your preferences, you can elect to make these gifts outright or subject to additional requirements. For example, rather than gifting your children an inheritance as soon as they reach adulthood, you might specify that they receive a certain percentage at age 25, 30, and 35 or that the inheritance may only be used for a limited set of purposes, such as higher education, buying a house, or other ends. In this way, trusts are sometimes referred to as conveying “control from the grave” since you can retain significant influence over gifts even after you pass away.
The important thing to remember with trusts is that they must be “funded” in order to be effective. Funding a trust is the process of transferring legal title of the assets to be held in the name of the trust or naming the trust as the built-in beneficiary of the asset. This allows the asset to transfer in accordance with the trust provisions after you pass away. Moreover, funding a probate asset into the trust essentially gives it a built-in beneficiary designation, which removes the asset from your probate estate and avoids need for court supervision in the probate process.
If you have minor children, you’ll nominate guardians for those children through a document known as a pour over will, which is used in tandem with the core trust document.
Is a Last Will or Revocable Trust Better for Military Servicemembers?
Should active duty and veteran servicemembers choose a last will or a revocable living trust? It’s largely a matter of personal preference.
Both a last will and revocable living trust allow you to specify who will handle your affairs after death, what should happen to the stuff you own, and who should care for any minor or special needs children you’re responsible for.
Compared to a revocable living trust, a last will is the more “set it and forget it” approach to estate planning. Once you complete and sign your last will, you don’t need to update it unless your wishes change or the person(s) you nominate to handle your affairs is no longer available to serve.
Revocable living trusts require more maintenance. After creating your trust document, you’ll have to do some additional work funding assets into your trust. As you sell or acquire new assets down the road, you’ll need to keep record of these assets moving out or into your trust.
Although more upfront work, the major benefit of revocable trusts over wills is that, when properly funded, trusts allow you to avoid probate court, which can be a time-consuming and expensive process depending on the size and nature of your estate.
Contrary to popular opinion (and many estate planning companies’ marketing), not all probate is “bad” by default. The cost and time that probate takes can vary greatly by state and even by county. Additionally, many states offer expedited probate proceedings for probate estates below a given threshold, which generally ranges from $50,000 to $250,000.
If you are early in your military career, fall below these small estate thresholds, or don’t own many probate assets to begin with, you may find a comprehensive last will package is all you need.
Durable Financial Power of Attorney for Military Servicemembers
A durable financial power of attorney gives a trusted individual, called an agent, the ability to enter into financial transactions on your behalf. You can choose to grant your agent broad authority over many different subjects, or designate a limited number of areas or circumstances in which the agent may act.
How is a granting power of attorney beneficial for active duty and veteran service members? Designating an agent to handle your financial affairs gives you leverage and a safety net. It gives you leverage as your agent can handle financial transactions while you are deployed or otherwise unavailable, such as paying bills or maintenance on a home or car. If you are temporarily or permanently injured and unable to manage your finances, your power of attorney acts as a safety net. Rather than getting stuck with a court appointed conservator, your agent acting under power of attorney can step in to manage your finances on your behalf, ensuring you are able to meet all your responsibilities and desires with as little interruption as possible.
Advance Healthcare Directive for Military Servicemembers
Military service can be dangerous. If you are injured or in an accident that causes you to lose the ability to make or communicate your healthcare preferences, an advance healthcare directive ensures that your medical team can provide care most in line with your preferences.
There are two components to an advance health care directive. The first is called a medical power of attorney, which is the designation of a trusted individual to make healthcare decisions on your behalf if you are unable to do so directly. This individual will take into account what they know about you, your desires, and any specific instructions you provide.
Those specific instructions are known as a living will. Not to be confused with a last will, a living will sets forth certain healthcare preferences in advance. These preferences may include responses to questions about your willingness to continue care if you are unconscious and receiving artificial nutrition or hydration (i.e., tube feeding) or your willingness to receive certain pain medication.
An advance healthcare directive is a safety net. As long as you retain ability to make and communicate your own healthcare preferences, any instructions that you provide your medical team will override any contrary provisions in your advance healthcare directive documents.
Other Special Considerations for Military Servicemembers When Creating Your Estate Plan
Creating your last will or revocable living trust package is a great way for military servicemembers to get your affairs in order before you deploy or after you separate from the military. It’s also a great time to consider other benefit options specific to servicemembers that may strengthen your family’s financial future.
Life Insurance for Military Servicemembers
Due to the risks associated with military service, every servicemember should consider purchasing life insurance. The Department of Veteran’s Affairs offers active duty and veteran servicemembers and their families a variety of low-cost life insurance options.
Active duty servicemembers can purchase Servicemembers’ Group Life Insurance (SGLI) at rates starting at just a few dollars per month. Eligible servicemembers are automatically enrolled at the baseline coverage rate. After enrolling, you can change coverage in $50,000 increments up to a $500,000 maximum benefit (as of 2024) or remove coverage completely.
When you leave the military, you can apply for Veterans’ Group Life Insurance (VGLI) within 1 year and 120 days from your discharge date, up to the amount of coverage that you had through SGLI. VGLI premium rates are more expensive than SGLI rates but still competitive to private insurance solutions. Be sure to shop around a bit to get the best coverage and rates for you.
Survivor Benefit Plan for Military Servicemembers
A Survivor Benefit Plan (SBP), also known as a Death Pension, provides financial support to military spouses and/or children when a military servicemember dies on active duty or after retirement.
The Survivor Benefit Plan provides the beneficiary with a monthly payment, which can be up to 55% of the servicemember’s retired pay and is based on the coverage amount selected by the servicemember. The monthly payment continues for life in the case of a spousal beneficiary and up to the age of 18 for a child beneficiary (or 22 if enrolled as a full-time student).
Dependency and Indemnity Compensation for Military Beneficiaries
If you die from a service-related injury or illness or died while eligible to receive VA compensation for a service-connected disability rated as totally disabling, your spouse, children, or parents may be eligible to receive VA Dependency and Indemnity Compensation (DIC).
DIC payments are made monthly to the beneficiary and vary depending on the relationship between you and the beneficiary, the nature of your disability, and the length of your service.
Financial Advisors for Military Servicemembers
Navigating all the benefits and financial options available to active duty and veteran servicemembers can be complex. You may wish to work with a financial advisor who specializes working with military personnel to ensure that you understand and receive all benefits for which you are eligible.
How Military Servicemembers Can Create Their Estate Plan
Military servicemembers have options when it comes to creating your estate plan.
Active duty servicemembers and their dependents can create a free basic last will package with the Legal Support Service Section Team (LSSS) on your base. But it’s not as easy as just walking into the office and walking out with your documents a short while later.
While the exact requirements vary by base, the process of creating your documents with the LSSS generally involves attending a 45-60 minute training seminar, completing a 10+ page questionnaire, and then meeting with a generalist attorney to construct and review the document. As the servicemember, if you create your last will with the LSSS, your options for who, how, and what you want your gifts to look like are fairly limited. The LSSS does not support customizing your plan beyond the basics and does not provide services to create a revocable living trust package.
As an alternative to creating your estate plan with the LSSS, you can engage an attorney to create your documents. How much you’ll pay to create your documents with an attorney depends on your particular situation and the attorney’s rates. Expect to pay $500 on the low end and up to several thousand dollars for a basic last will or revocable living trust when creating with an attorney.
Finally, you might consider using an online will or trust service like JIC Estates. Choosing this route offers much more customization than available through the LSSS and is more economical than creating with an attorney. Plans start at just $135 for a comprehensive last will package and $348 for a revocable living trust package.
Additionally, when you create your plan with JIC Estates, you’ll receive lifetime access to our members portal, where you can safeguard important information on your estate and update your documents at any time. If you would like your documents reviewed by an attorney, you can do so for an additional charge.
Next Steps
If you are an active duty or veteran servicemember and have any questions regarding your estate plan, please reach out to our JIC Estates Member Success team today.
Both our JIC Estates Co-Founders come from military families – Morgan himself being a Navy Information Warfare Officer veteran – and it would be our honor to assist yours.
When you're ready to get started, take the quiz to find whether a revocable trust or last will is best for you.
