Military life asks families to prepare for situations most people would rather avoid thinking about. Deployments, training schedules, permanent changes of station, overseas assignments, and the possibility of a service-related injury can all affect how your family handles money, property, and important decisions.
That is why estate planning matters so much for military families stationed in Virginia or calling the Commonwealth home.
A strong plan usually involves more than a will. It should coordinate your Servicemembers’ Group Life Insurance (SGLI) beneficiary designation, a properly prepared power of attorney, and a revocable living trust: what we like to describe as a box with no lid.
As a military retiree, Don Shaw understands that service members and veterans often have to make important family decisions under challenging circumstances. We also understand that military families may not stay in one place for long. Your estate plan should be organized, understandable, and prepared to work when your family needs it.
Start with the SGLI beneficiary designation
SGLI is an important source of financial protection for many service members. But one point causes confusion: SGLI generally follows its own beneficiary designation: not the instructions in your will.
Your SGLI proceeds are paid according to the beneficiary information on file through the appropriate military system, such as the Servicemembers’ Online Enrollment System (SOES). The VA SGLI/VGLI Handbook explains the rules and options available to service members.
That means you can have a carefully drafted Virginia will, but if your SGLI designation is outdated, the insurance may still be paid to the person or people listed on that designation.
Review these details carefully
Military families should review their SGLI beneficiary designation after major life changes, including:
- Marriage or divorce
- Birth or adoption of a child
- A spouse’s death
- A change in the relationship with a beneficiary
- A permanent change of station
- The creation or amendment of a trust
- A change in your family’s financial needs
You may be able to name primary and contingent beneficiaries and divide the proceeds by percentage. Take time to confirm that the designation reflects your current wishes and that the names and percentages are clear.
If you have minor children, think carefully before naming them directly. A minor may not be able to receive and manage a large insurance payment independently. Court involvement or another adult’s management of the funds may become necessary.
Depending on your goals, you may want to coordinate the SGLI designation with a trust for your children or another carefully drafted plan. A trust may allow a responsible trustee to manage the money for education, housing, health care, and other needs over time.
The important point is simple: your SGLI designation should be reviewed as part of your overall estate plan: not treated as a separate form you complete once and forget.
Use a Virginia-focused power of attorney
A power of attorney allows you to authorize another person to act for you. For a military family, that person may need to handle banking, real estate, taxes, insurance, vehicle matters, or other financial responsibilities while you are deployed, stationed elsewhere, or unable to manage things personally.
A power of attorney can be especially helpful when one spouse is away and the other spouse needs to handle practical matters at home.
But not every power of attorney is equally useful. A generic form may not give your agent the authority needed for a particular transaction. Some banks, financial institutions, and government agencies may also have specific review procedures.
For a Virginia-centered estate plan, it is important to understand how the document fits Virginia law and your family’s actual circumstances. Virginia’s Uniform Power of Attorney Act is found in Title 64.2, Chapter 16 of the Virginia Code.
Virginia law also recognizes certain military powers of attorney. Under Virginia Code § 64.2-1604(C), a power of attorney executed outside Virginia may be valid in Virginia if it meets the requirements for a military power of attorney under federal law, among other possible standards.
That does not mean every old military power of attorney will meet your current needs. Documents should be reviewed for:
- The identity and reliability of your agent
- The powers your agent actually needs
- Whether the document is durable
- Whether certain powers must be specifically stated
- Whether a replacement agent should be named
- Whether the document still reflects your family and finances
- Whether financial and health care decisions require separate documents
A financial power of attorney generally helps someone act for you during your lifetime. It does not control the distribution of your property after death. That is where your will, beneficiary designations, and trust work together.
Think of your revocable living trust as a box with no lid
A revocable living trust can be useful for military families who own property in Virginia, move frequently, have children, or want a plan for managing assets if one or both spouses become unable to manage them.
We often explain a revocable living trust this way: it is a box with no lid.
You can place assets into the box, take them out, and change the instructions while you are living and have the legal capacity to do so. You generally continue to control the assets during your lifetime. If you become incapacitated, a successor trustee can step in and manage trust property according to the trust’s instructions. After your death, the trustee can distribute the trust assets to your beneficiaries.
The box is not a magic solution, though. It only helps with assets that are properly transferred to it or directed to it. A trust that is signed but never funded may not accomplish what your family expects.
Potential benefits for a Virginia military family may include:
- Private management of trust assets
- A plan for managing property during incapacity
- A way to provide ongoing management for children
- A smoother transition when a spouse is deployed or unavailable
- Instructions for distributing assets after death
- Less reliance on court involvement for assets properly held in the trust
A revocable living trust may be especially helpful if your family owns a Virginia home, has investment accounts, or expects to acquire property in more than one state. The details depend on how each asset is titled and how each account’s beneficiary designation is completed.
Pair the trust with a pour-over will
If you create a revocable living trust, we recommend pairing it with a pour-over will.
The trust is designed to manage assets placed in the box during your lifetime. The pour-over will acts as a backstop for certain assets that were not transferred to the trust before your death. It directs those assets into the trust so they can ultimately be handled under the trust’s instructions.
This does not mean every asset automatically avoids probate. Assets left in your individual name may still need to pass through probate before they can be transferred into the trust. But the pour-over will helps reduce the risk that an overlooked asset will be distributed in a way that does not match your larger plan.
Virginia law addresses testamentary additions to trusts in Virginia Code § 64.2-427. A Virginia will also must meet applicable execution requirements, including signing and witness requirements. Your attorney can help coordinate the trust, pour-over will, beneficiary designations, and other documents as one plan.
Keep the pieces coordinated
SGLI, a power of attorney, and a revocable living trust each serve different purposes:
- SGLI designation: directs who receives the insurance proceeds.
- Power of attorney: allows someone to act for you while you are living.
- Revocable living trust: manages property placed in the trust during your lifetime and after death.
- Pour-over will: provides a backstop for certain assets left outside the trust.
- Health care documents: explain your medical wishes and identify who may help make health care decisions.
The most common problem is not failing to sign any document at all. It is signing several documents that do not work together.
For example, your trust may divide assets equally among your children, while your SGLI designation still names an old beneficiary. Or your spouse may have a power of attorney that does not cover a transaction involving your Virginia property. These details matter.
We recommend keeping a current list of your accounts, insurance policies, property, digital assets, and important contacts. Store copies of your planning documents where your spouse or successor trustee can find them. Review the plan after major family, financial, or military changes.
You can also learn more about our approach through our Virginia estate planning services and estate planning basics.
Military families make sacrifices to protect others. Your estate plan should help protect the people and property most important to you. If you are stationed in Virginia or call Virginia home, contact Don Shaw Law, PLLC to talk with us about coordinating your SGLI designation, Virginia power of attorney, revocable living trust, and pour-over will. We would be glad to learn about your family and help you take the next step.
