Estate planning is a crucial aspect of ensuring the smooth transition of assets and entitlements after death. For military veterans, the process requires particular attention to how military pensions and veteran benefits are considered and integrated. These entitlements are often a considerable portion of a veteran’s financial and healthcare support structure and, consequently, are of significance to family members or dependents.
Wills and estate documents typically stipulate how assets are to be distributed, and for veterans, it is essential to understand the unique nature of military-related payments and benefits. Not all benefits can be passed down or incorporated traditionally into a will. As such, understanding what can be included, how it can be handled, and what restrictions may apply is fundamental.
Military pensions are retirement payments provided to service members based on their years of service and rank. These pensions are generally earned after a minimum number of years—often 20 or more—and can provide a significant lifelong income stream. Veteran benefits, on the other hand, may include healthcare services provided by the Veterans Health Administration, educational benefits such as the GI Bill, disability compensation, housebound or aid and attendance benefits, and other support services.
These benefits are administered through various agencies and government bodies, chiefly the Ministry of Defence and Veterans UK in the United Kingdom. In other countries, such as the United States, similar benefits are managed by the Department of Veterans Affairs. For the purposes of this discussion, we will focus on the systems applicable to British veterans but will highlight universal principles where appropriate.
A vital step in estate planning for veterans involves identifying which elements of their benefits and pensions can be passed on and which cannot. Military pensions, particularly in the UK, do not usually continue to a beneficiary unless a survivor’s pension has been set up. Hence, a veteran’s will cannot assign ongoing military pension payments unless provisions already exist within the pension plan.
For example, under the Armed Forces Pension Scheme (AFPS), there is provision for dependants. Upon the death of a pensioner, a spouse or civil partner may receive a portion of the pension as a survivor’s pension. Children’s pensions may also be payable under certain circumstances. However, these payments are not governed by the deceased veteran’s will, as pension successors are usually designated within the terms of the pension itself.
Benefits such as healthcare or disability compensation typically end upon the death of the veteran and cannot be bequeathed. However, there may be one-time payments or bereavement support made to the surviving family members. These should be referenced within the estate handling and may require proper notification to the benefit-issuing authority to facilitate claims.
Although ongoing pension payments cannot typically be transferred through a will, a veteran can express wishes and provide instructions related to entitlements that may impact the estate. Some suggestions include:
– Clarifying the existence of a survivor’s pension and providing beneficiary details
– Suggesting how lump-sum payments, such as a final salary or commutation lump sum, should be distributed
– Highlighting previous nominations made directly within the pension scheme
– Directing any residual funds that result posthumously, such as one-time death benefits, to an intended cause or individual
These actions ensure that family members and legal representatives are aware of entitlements and can act to claim or preserve them according to proper channels.
In cases where a veteran has opted for a commutation of pension – taking a portion of their pension as a one-time lump sum – that commuted sum becomes part of their estate and can be distributed via a will. It is essential to detail this in the estate planning documentation and specify how these funds should be allocated.
In the UK, veterans may receive support from bodies such as the Royal British Legion, SSAFA (the Armed Forces charity), and Veterans UK. These organisations often provide housing, emergency financial support, and advocacy. While support is not typically transferrable, veterans can indicate within a will their desire for a particular charity to receive donations or their preference that family members seek assistance where eligible.
For instance, a veteran who has benefited significantly from help during their lifetime might want to leave a portion of their estate to a veterans’ charity. This can be a valuable and meaningful expression of gratitude, and can be structured as a legacy gift. These gifts are often tax-efficient and can reduce the estate’s liability for Inheritance Tax under UK rules.
Additionally, where a veteran was receiving long-term care or equipment provided through veteran aid schemes, the will should include instructions for the respectful return or donation of these items. Many charities facilitate returns or redistribution to other veterans in need.
When drafting a will, the appointment of an executor is a central consideration. For veterans, it may be beneficial to choose someone familiar with military systems or who has legal guidance in handling military documentation and reporting. This executor will often be responsible for notifying Veterans UK or related bodies, managing the cessation or continuation of certain payments, and coordinating with charitable organisations, if applicable.
A knowledgeable executor can also ensure that all military documents, service records, pension membership certificates, and identification numbers are on hand – facilitating the logistics of claiming benefits by survivors and handling compliance with governmental rules regarding veteran benefits.
Including a “Letter of Wishes” alongside a will may be helpful. This is not a legally binding document but can offer context and guidance to executors or beneficiaries. Veterans could use it to:
– Provide contact details for military charities that offer bereavement support
– Describe their service history and preferred tributes
– Suggest funeral arrangements, especially if military traditions or honours are requested
– Clarify intentions for the use of any military memorabilia, medals, or documentation
Beyond pensions and financial benefits, many veterans possess items of service such as medals, commendations, or regimental memorabilia. These can carry substantial sentimental, historical, and potentially monetary value. While they are often informally handed down, including specific provisions in a will can avoid disputes and ensure these items are preserved respectfully.
Veterans may wish to bequeath medals to a museum, regiment association, or military archive. Such instructions should be explicit, including the full name and contact information of the intended institution. Conversely, the will can stipulate that items be passed to descendants, ideally with an indication of their history and meaning.
Documentation regarding provenance and recognition can enhance the sentimental value of these items and help future generations understand the service contributions of their relative.
Survivor’s benefits are a vital component of financial planning for many military families. As noted, these are usually granted based on the regulations of the pension scheme in question, and naming an individual in a will does not automatically qualify them for such benefits.
Therefore, veterans who wish to protect their surviving partner or children must ensure that they have appropriately nominated them within the rules of their pension plan. Some schemes differentiate between married and unmarried partners, and children’s eligibility may be affected by age or disability status.
Taking proactive steps to confirm these nominations while still alive can avoid delays and disputes upon death. Couples not in formal unions are particularly vulnerable if nomination forms have not been completed correctly. It is prudent to keep copies of any nomination or beneficiary forms in a secure place and to inform the executor or solicitor of their existence.
Military pensions and benefits can have implications for the broader estate planning process. Commuted pension sums and additional long-service bonuses can increase the size of an estate, potentially bringing it above thresholds for Inheritance Tax.
Veterans should work with financial advisers to assess the impact of their pension decisions on their estate and explore potential avenues for tax planning. Charitable gifts to veteran organisations can reduce tax burden and leave behind a lasting legacy.
In addition, death-in-service benefits or gratuities may be payable depending on whether the veteran was still serving or had recently retired. These funds may or may not form part of the estate and clarifying their status with a solicitor is an important aspect of comprehensive planning.
Given the complexity surrounding military pensions and benefits, engaging a solicitor with experience in military matters is highly advisable. They can provide clarity on what constitutes part of the distributable estate and help draft provisions that align with existing pensions regulations.
Further, legal professionals can ensure compliance with the Armed Forces Covenant, uphold your wishes in relation to burial or cremation preferences, and liaise with agencies responsible for benefits payment or cessation.
Veterans with complex circumstances – such as multiple marriages, children from different relationships, or service in multiple countries – particularly benefit from professional legal advice when crafting their final wishes.
While military pensions and veteran benefits provide essential support during a veteran’s lifetime, they also introduce complexities when it comes to estate planning. Understanding which portions of these benefits can be passed on, how to prepare for survivor entitlements, and the appropriate way to include these elements in a will is crucial.
Veterans have unique needs and significant legacies. By taking the time to appropriately incorporate military-related assets and directives into estate planning, they ensure that their service is honoured and that their family is cared for in accordance with their values and contributions. Whether through sharing medals, securing survivor pensions, or leaving gifts to veteran charities, comprehensive planning reflects the foresight and discipline that characterise military life.
Privacy Policy
Terms and Conditions
Disclaimer
COPYRIGHT © 2024 MY WILL AND PROBATE
