All families (and single adults for that matter) should have a financial plan and essential documents like a will and power of attorney (POA).
For military families, this becomes especially important when a loved one is or will be deployed.
Not having these documents in a safe place, or not being able to access them, could slow down access to important benefits and make it more difficult for your family to make important decisions.
What’s a Will?
There are two kinds of wills, a “living will” and a “last will.”
A living will is a legal way to spell out who will make decisions about life-sustaining treatments for someone who is expected to die. Having a living will is especially important if you or your loved one have strong feelings about how you would like to be cared for if you were in a coma or otherwise unresponsive, covering such topics as feeding tubes and resuscitation.
Although you can use a Healthcare Power of Attorney to designate someone to act on your behalf for a wide range of medical issues, a living will is written specifically for end-of-life care decisions.
It’s also considered to be one of the cornerstones of a complete estate plan, according to Ross Cutler, CFP®, Vice President of Business Development with AAFMAA Wealth Management & Trust. “While it would be impossible to plan for every end-of-life care situation, a living will can give families direction on how to make decisions during a very difficult time,” said Cutler.
A last will is something everyone needs, but few people have. According to a recent survey, only four in 10 American adults have a last will.
Why is this important? The reality is that if you don’t have a last will, your assets will generally be distributed based on your state’s intestacy laws. “Having a will ensures that all of your assets pass to whomever you choose rather than who the state designates under the laws of intestacy,” said Gretchyn Meinken, an estate planning attorney in Alexandria, Virginia. When someone dies without a will, generic state rules kick in, and a judge will likely decide how your property is distributed and who will care for your children, she said.
“For servicemembers, a will provides a way for your grieving family to navigate bureaucratic hassles -- to access your paycheck or survivor benefits, for example,” said Cutler.
Powers of Attorney (POA)
There are several types of POAs, which allow you to designate who will manage your financial, legal and personal affairs when you can’t. Each can be customized to your needs.
A military POA gives the designee the power to act on the servicemember’s behalf without worrying about local requirements. In other words, this document is legally binding regardless of state laws. “This simplifies things for your spouse and other family members so they can cash your paychecks, file a tax return, obtain military ID cards, buy or sell a house, or qualify for government housing and enroll in the Defense Enrollment Eligibility Reporting System (DEERS),” said Cutler.
A durable POA applies even if you become mentally incapacitated and cannot make or communicate decisions for yourself. Rules vary from state to state, but a durable POA must have specific language or use an approved form. A non-durable POA terminates if you become mentally incompetent.
A springing POA only goes into effect for a time you’ve defined, such as when you leave the country or if you’re injured, while a general POA gives your designee sweeping powers in handling your legal and financial matters. A limited POA (also known as a special POA) applies only to the matters you specify. For example, you could designate someone to take care of your children or to be able to access certain bank accounts.
Finally, as previously mentioned, a healthcare POA allows someone to make healthcare decisions on your behalf if you are unable to do so.
Once you and your family members have created your legal documents, make sure they are stored in a safe place and that others know where they are.
We’re Here to Help
AAFMAA Wealth Management & Trust Relationship Managers can help you sort through your portfolio options to help you plan for a more secure financial future. Our priority is to help ensure the financial security and independence of the American Armed Forces community by providing investment management, financial planning, and trust services. Call 1-910-307-3500 or click here to request a complimentary Investment Portfolio review. There’s no cost or obligation.