With Veterans Day still on our minds, we all have an opportunity to reflect on the unique challenges and responsibilities that come with military service. Members of the armed forces face risks and experiences that set them apart from civilians, making estate planning especially vital. In addition to the increased likelihood of injury or death due to active service, military members also receive specialized benefits that must be carefully considered in their estate planning. With these factors in mind, allow me to discuss estate planning for military members in Maryland.
Understanding the Foundation of Estate Planning
At its core, estate planning ensures that your assets are managed and distributed according to your wishes after your death or in the event of incapacity. For members of the military, the essential components of an estate plan are similar to those of civilians, though certain military-specific benefits may require additional planning.
A Last Will and Testament or revocable living trust remain the cornerstone of any estate plan. Through either one, you can specify how your property will be distributed, designate beneficiaries, and appoint a Personal Representative (referred to as an “Executor” in some states) or Trustee, to oversee your estate’s administration. If you are a parent, your Will also allows you to nominate a guardian for your minor children, ensuring that they will be cared for by someone of your choosing should something happen to you. Without a valid Will or Trust, Maryland’s intestate succession laws will determine how your assets are divided, which may not align with your personal wishes.
Advance directives are another key part of a comprehensive plan. These legal documents allow you to make healthcare decisions in advance and appoint someone you trust to act on your behalf. A Healthcare Power of Attorney authorizes a chosen Agent to make medical decisions if you cannot communicate your preferences. A Living Will allows you to set forth your instructions regarding life-sustaining treatment or end-of-life care. Together, these documents protect your autonomy and relieve loved ones of the burden of making difficult decisions without knowing your wishes.
Incorporating Military-Specific Benefits
Military service brings with it several benefits and financial protections not available to civilians. Including these benefits in your estate plan ensures that they are distributed properly and that your family receives the full value of what you have earned through service. Common benefits to consider include:
- Servicemembers’ Group Life Insurance (SGLI): SGLI is a low-cost life insurance program for active-duty servicemembers that provides financial support to designated beneficiaries upon the servicemember’s death. It is crucial to keep your beneficiary designations current and to name both primary and contingent beneficiaries. If your chosen beneficiary is a minor or has special needs, it is wise to create a trust, such as a Special Needs Trust, to manage the funds and preserve eligibility for government assistance programs. Listing your SGLI benefits in your Will or trust ensures consistency and avoids potential confusion.
- Active Duty Survivor Benefit Plan (ADSBP): If you die while on active duty, your family may be eligible for the ADSBP, which provides an ongoing annuity to surviving dependents. This benefit replaces a portion of the income lost due to the servicemember’s death. The annuity generally equals 55 percent of the retirement pay the servicemember would have earned if fully disabled at the time of death. Keeping your beneficiary information up to date is critical to ensure timely and accurate payments.
- Survivor Benefit Plan (SBP) for Retirees: Retired servicemembers may opt to reduce their monthly retirement pay in exchange for continuing income to their beneficiaries after death. The SBP provides important long-term security for surviving spouses and dependents. If both a spouse and children survive you, benefits are paid to your spouse first and then pass to eligible children if your spouse dies or remarries before age fifty-five. When only children survive, the benefit is divided equally among them until they age out of eligibility. For families with a child who has special needs, the SBP can continue for that child’s lifetime as long as they remain unmarried. In that situation, establishing a Special Needs Trust within your estate plan is vital to avoid disrupting eligibility for Medicaid or Supplemental Security Income.
- Dependency and Indemnity Compensation (DIC): This benefit is available to survivors, spouses, children, or parents, of servicemembers who die on active duty or because of a service-related injury or illness. The monthly tax-free payments provide ongoing financial assistance to those left behind. Including DIC benefits in your estate plan ensures that your survivors understand the eligibility requirements and process for applying.
- Death Gratuity: If you die while serving on active duty, your next of kin is entitled to a one-time, tax-free payment of $100,000 (as of 2025). This benefit provides immediate financial support to help your family cover expenses and transition during a difficult time. Properly documenting your beneficiary for this payment avoids delays in distribution. The use of a Trust may provide significant protection for your family and beneficiaries.
Can We Help You with Estate Planning for Military Members in Maryland?
For more information, please contact our estate planning office in Owings Mills, Maryland by calling 410-654-3850 to schedule an appointment.
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