Why Estate Planning Matters to You in the Military (Even if You Think it Doesn’t)

I recently attended a financial planning conference and listened to a presentation by Natalie Choate, a prominent estate planning attorney from the Boston area. Her presentation, Lifetime Distribution Strategies for Your Client’s Retirement Benefits, probably would have put me to sleep if not for two very important things. First, Ms. Choate is a very gifted speaker. Her delivery kept even the most experienced planners entertained and focused. Second, estate planning matters to EVERY person. Let me repeat—estate planning is very important to EVERY. SINGLE. PERSON.

If you don’t think so, here are four reasons you should reconsider:

4 Reasons You Need an Estate Plan

1. To Make Things Easier on Your Family

Effective estate planning is hard and sometimes expensive. However, improper estate planning is harder for your loved ones, and definitely more expensive.

Although each family situation is unique, there is usually one right way, and many wrong ways, to plan your estate. In many simple cases, a good estate plan may be very inexpensive—basically the cost of a will, living trust, and some other basic estate planning documents that most families should have.

In some cases, a good estate plan may cost thousands of dollars. In all cases, bad estate planning (or no estate planning at all), WILL cost much more than good planning would have…usually by many more thousands of dollars than an estate plan would have cost.

Note: Estate planning is much less expensive for service members, since you usually don’t have to pay for a will or Power of Attorney if you can access base legal services.

2. You Have Assets

This could include money, investments, or a house. You could have a retirement plan, like a 401(k) or rollover IRA. Estate planning means deciding who gets these things before you die. This can get hard, emotionally and mentally, especially when you’re sitting in a lawyer’s office and answering the question, “What if your children die? What do you want to do then?”

It’s tough, and it’s important. If nothing else, consider the money you could waste if the IRS gets involved or your estate gets tied up in probate court. Depending on the complexity of your financial situation, you may want to consider consulting with a fee-only financial planner to help guide you through the process.

Remember, having an estate plan is part of your financial readiness.

3. Estate Planning isn’t an Immediate Need. Until it is.

You get one opportunity to get estate planning right. Fortunately, that opportunity is over your entire life. Unfortunately, you don’t know when your time will expire. Once you die, you don’t get a vote anymore, except for the last one that you cast. Make it count.

It doesn’t matter if you’re on deployment or on leave. You can die at any time, so your estate plan needs to stay up to date.

4. Estate Planning is a Fluid Process

A will that you put together 20 years ago probably won’t do what you want today. If you’ve had children, gotten married, gotten divorced, or had any major life changes, you might want to think about whether your money is still going to the right place. Over my Navy career, I’ve heard so many stories (and personally witnessed a couple) of Sailors passing everything to an ex-spouse or someone they never intended to, sometimes leaving their intended beneficiaries with nothing. Even if your life hasn’t changed, state and federal laws are always changing. What might have been wise a couple of years ago may not be right today.

Note: Take 30 minutes every year to ask yourself these questions:

Is my dependency information up to date in DEERS? Are beneficiaries noted correctly on all of my accounts and policies?

• Does my SGLI (or VGLI) have the correct beneficiaries? What about another life insurance policy?
• What other accounts do I have that require beneficiaries? Accounts such as IRAs, 529 plans, and TSP all should have designated beneficiaries. Make sure they’re accurate.
• If I died today, would my will take care of everything that I want it to? Keep in mind that accounts with beneficiaries, joint accounts, and other jointly owned assets may pass outside of a will.
• Would my designated representative have the information they need to access all of my accounts and transfer them to the right place?

Take Action Now – Schedule an Appointment to Create a Will

What should you do? Don’t make it hard on yourself. Set up an appointment with your installation’s or command’s legal office to take care of the basics—will, power of attorney, etc.

If you’re working with a fee-only financial planner, they should be able to help you address the financial aspects of your estate plan. You should especially review your estate plan if you’re preparing for a major change—deployment, PCS, marriage, divorce, new children, or leaving the military. Even if none of these apply, take 30 minutes every year to review your legal documents and make sure they reflect your wishes. You’ll be glad you did.

As always, this blog answers your questions and addresses your concerns. If you like this blog, please forward it to other people who may benefit. In the meantime, take charge of your life!

Meet the Author

Forrest Baumhover

Forrest Baumhover is a Certified Financial Planner™ and enrolled agent. As a retired naval officer, Forrest helps veterans, transitioning service members and their families address the financial...

Read full bio