Veterans Benefits in Estate Planning
When it comes to estate planning, veterans in Rhode Island have unique benefits and considerations that can significantly impact their long-term financial strategy.
Whether you're a veteran yourself or assisting a loved one who served, knowing how state and federal veterans' benefits integrate with wills, trusts, and long-term care arrangements is critical.
The experienced estate planning attorneys at The Law Offices of Howe & Garside, Ltd. have helped countless veterans create a more comprehensive and secure estate plan. From property tax exemptions to VA pensions and Aid and Attendance benefits, the firm is well-versed in the unique estate planning needs of veterans in all of Rhode Island, including Newport, Lincoln, Providence, Warwick, Bristol, Westerly, Woonsocket, and Pawtucket.
This blog will explain what veterans and their families need to know to make informed, strategic decisions.
VA Benefits and Long-Term Care Planning
One of the most important aspects of estate planning for veterans is preparing for potential long-term care needs. The cost of assisted living or nursing home care can be overwhelming, but certain VA benefits can alleviate this financial burden.
The VA Aid and Attendance Pension is a lesser-known benefit that provides monthly payments to qualifying veterans and surviving spouses who require help with daily activities. This can be especially valuable when planning for future healthcare costs.
Eligibility for Aid and Attendance is based on factors like income, assets, and medical need, and it can work alongside other benefits like Medicaid. However, there are strict asset limits and a three-year look-back period for asset transfers, similar to Medicaid rules.
This is why it’s essential to work with The Law Offices of Howe & Garside, Ltd., whose attorneys are familiar with VA benefits and Rhode Island’s Medicaid planning laws. Strategic tools like irrevocable trusts or planned gifting can help veterans qualify for these benefits without jeopardizing their long-term financial stability.
Property Tax Exemptions for Veterans in Rhode Island
Rhode Island veterans may be eligible for property tax exemptions that offer meaningful savings and should be factored into estate and financial planning.
These exemptions vary by municipality but often include discounts for wartime service, disability status, and Purple Heart recipients. For example, some towns offer exemptions that reduce the assessed value of a veteran’s primary residence, which lowers annual property tax bills.
You can apply for these exemptions through the local assessor’s office and provide documentation, such as discharge papers (DD-214) and proof of disability if applicable.
For estate planning purposes, these exemptions can help preserve assets and reduce housing-related expenses during retirement, especially if the veteran wishes to age in place or pass the home to heirs.
Survivor Benefits and Dependency and Indemnity Compensation (DIC)
Survivors of veterans may be entitled to specific benefits that should be integrated into estate planning strategies. Dependency and Indemnity Compensation (DIC) is a tax-free monthly benefit paid to eligible survivors of service members who died in the line of duty or as a result of a service-connected condition.
Spouses, children, and sometimes even dependent parents can qualify under certain conditions. For estate planning, survivors should know what they may be eligible for and how to access those benefits.
Including instructions and documentation in a will or trust, such as military discharge papers and VA claim records, can make the claims process smoother. Families should also be aware of continued health care options and educational benefits for dependents, which can significantly impact financial planning for future generations.
Coordinating VA and Medicaid Benefits
Many veterans and their spouses rely on VA and Medicaid benefits as they age, particularly for long-term care. In Rhode Island, Medicaid covers nursing home care and some in-home support services, but eligibility rules are strict.
Veterans may receive a VA pension while also qualifying for Medicaid, but coordination between the two programs is key to avoiding benefit reductions or disqualification.
Estate planning tools like irrevocable trusts, life estates, and spend-down strategies can help structure assets to remain eligible for both programs. Since both the VA and Medicaid have look-back periods and asset thresholds, timing and documentation are essential.
Documents Every Veteran Should Include in Their Estate Plan
Creating a solid estate plan means more than just drafting a will; it’s about making sure that your wishes are honored, your loved ones are protected, and your benefits are accessible when needed. For veterans, having certain documents in place can make all the difference when applying for benefits or managing healthcare decisions.
These documents include:
DD-214 (Certificate of Release or Discharge From Active Duty)
This document is proof of military service and is required to access nearly all VA benefits.
It is needed for VA healthcare, pensions, and burial benefits: Without it, your eligibility for these programs can be difficult - if not impossible - to verify. Most applications through the VA begin with a request for this form.
It should be stored in a safe but accessible place: A fireproof safe or secure digital vault is ideal for long-term storage. Make sure your family or executor knows exactly where it is in case of an emergency.
It is necessary to provide copies to your estate executor or a trusted family member: This assures they can act quickly on your behalf when filing benefit claims or arranging military funeral honors. You might also consider providing a copy to your attorney if they’re helping manage your estate.
The DD-214 is the key to unlocking your VA benefits. Keep it safe and accessible to make sure your service is recognized and your benefits arrive without delay.
Last Will and Testament
This specifies how your assets will be distributed and who will be responsible for managing your estate. Be sure to:
Name an executor (preferably someone familiar with veterans’ benefits)
Include instructions for personal property, real estate, and military memorabilia
Designate guardianship for minor children if needed
Your last will and testament provides clarity and direction for your loved ones, helping to assure that your legacy, especially as a veteran, is honored according to your wishes.
Power of Attorney (POA)
A POA authorizes a trusted person to make financial or legal decisions if you become incapacitated. It's critical for managing VA claims or Medicaid applications on your behalf.
A well-drafted POA assures that someone you trust can step in seamlessly to manage your affairs and protect your access to important benefits when you can't do so yourself.
Healthcare Proxy and Living Will
These documents inform others about your medical preferences and who should make decisions if you cannot. Be sure to:
Include specific guidance on end-of-life care
Make sure your proxy understands your wishes and has access to the document
Having a clear healthcare proxy and living will can prevent confusion and emotional stress during medical emergencies, aligning your care with your values and wishes.
Trusts (Revocable or Irrevocable)
These are useful for asset protection, Medicaid planning, and efficient asset transfer. Irrevocable trusts can help preserve eligibility for long-term care benefits, and revocable living trusts allow for flexibility while avoiding probate.
Having these documents in place creates a smoother process for your family and can prevent delays in accessing important benefits. It's also wise to review your plan with an experienced estate planning attorney every few years or after major life events to keep everything up to date.
Contact an Estate Planning Attorney Today
Getting your veterans' benefits in order for estate planning is essential, and that's where The Law Offices of Howe & Garside, Ltd. comes in. The firm serves clients throughout Rhode Island, including Newport, Lincoln, Portsmouth, Providence, Warwick, Bristol, Westerly, Woonsocket, and Pawtucket. Schedule an appointment today to start the process.