The Importance of Estate Planning

By Brett C. Conyers, Fort Bliss Legal Assistance Office

Although voluntary, it is a good idea for everyone to have a Last Will and Testament.  Whether you serve in the Active military, are a military retiree, or are an adult military family member, you should have a will.  It does not matter if you have yet retired, are married or single, have children (whether or not any are minors), or consider yourself wealthy, you should have a will.  At the very least, you should make an appointment to speak to an attorney in the Fort Bliss Legal Assistance Office about estate planning.  The Fort Bliss LAO will discuss an entire estate plan, which includes a Last Will and Testament, instructions that control non-probate assets, and documents that will be used in case you are incapacitated to delegate to someone the authority to manage your financial affairs and health care. 

A will is a legal document that allows you to transfer property when you die to whomever you choose through a court process called probate.  A will also allows you to coordinate with your spouse who is the other parent of your minor children to nominate a guardian who will raise your minor children and control their estate when you and the other parent pass away.  Without a will, your property transfers to your closest living relatives (heirs-at-law) in proportions described in a state code through a court process called administration.  There are disadvantages to dying “intestate,” or dying without a will, which can be avoided by having a will. 

In addition to having a will, you may also transfer assets without any court process by contractual transfers using beneficiary forms.  Such assets that transfer at death without any court intervention are called non-probate or non-testamentary assets.  You may name a beneficiary or beneficiaries in a “pay on death certificate” form, which transfers at death assets deposited in bank accounts.  You may also name a beneficiary or beneficiaries in a “transfer on death” form, which transfers at death stocks, bonds, and other securities held in brokerage accounts or mutual funds.  Known as “contractual transfers,” these instructions are legally binding under state law, and will be obeyed without a court supervising the process.  Your attorney will advise you on the advantages and disadvantages of using such “POD” and “TOD” forms to contractually transfer assets to a named beneficiary when you die and work to align these instructions with those in your Last Will and Testament. 

You may also own accounts jointly with someone and these accounts transfer automatically to the surviving owner.  Financial institutions generally refer to them as “survivor accounts.”  Securities in brokerage accounts and mutual funds may be owned jointly and transfer to the surviving owner/owners upon your death.  Look at your last monthly account statement to see if you own such an asset jointly with your spouse.  If the asset is jointly owned, you should see his or her name next to the word “beneficiary,” or JTROS (joint tenants with right of survivorship) or JWROS (joint with right of survivorship).  If that is the case, sole ownership will transfer to the survivor as a matter of law regardless of what you state in your will. 

Some states have laws that grant you additional options to avoid probate for transferring motor vehicle titles and real estate.  Some states allow an owner, or owners if owned by multiple people, named on a motor vehicle title to transfer ownership to someone else using a form accompanying the title or even in the title certificate itself.  Check with the state where your motor vehicle is titled and registered. 

Many states allow the same in a properly executed deed that is then filed in the state’s land records.  You should be aware that there is a trend for states to change their laws to expand the use of contractual transfers and to allow these “transfers by title” or “transfers by deed,” as they are called, so court-controlled transfers by probate or administration are avoided.  This is especially true for married persons.  Your attorney will advise you on non-probate transfers allowed by your state of domicile.

You may also transfer assets at death that you placed in a trust during your lifetime.  Army legal assistance offices, to include the Fort Bliss Legal Assistance Office, are not resourced to create living or inter vivos trusts for you to fund during your lifetime, thereby avoiding probate.  While there are reasons why a “trust-based” transfer would be better for your family when you die, a probate-based transfer using your will is likely the best option for you, especially if your state of domicile is Texas.  Discuss the pros and cons of creating an inter vivos trust with your attorney. 

Also be prepared to give your attorney a list of assets and a description of how they are owned (separately, jointly with a spouse and with right of survivorship or as a POD/TOD account).  The purpose is not just to advise you on options to avoid probate, especially if one spouse outlives the other, but to assist you with a plan that avoids litigation, confusion, and even family strife that could result if there is an inconsistency between instructions in contractual transfers and your Last Will and Testament. 

To complete your estate planning set of documents you will also be offered two or three additional, or “ancillary,” documents so you can plan for someone else to manage your property/financial transactions and make health care decisions if you cannot because you are incapacitated.  These forms are called powers of attorney.

The first such POA delegates to an agent your decision-making authority.  A POA allows an agent to sign financial and property transactions for the principal (person who signs the POA).  The principal is bound to the transaction as if the principal signed the document their self.  Medical POAs allow agents to make medical decisions for a principal who becomes a medical patient, and to sign documents for the patient in a doctor’s office, hospital or other healthcare facility.

Whether financial or medical, powers of attorney may take effect when signed and expire on a certain date or they may become effective in the future on the occurrence of a doctor’s certification of incapacity or, in the case of military members, an overseas deployment.  A power of attorney that takes effect in the future is described as “springing.”  A power of attorney can be limited to specific transactions or be very broad and cover almost any conceivable transaction.  A power of attorney limited to specific transactions or a category of transactions is called a Special Power of Attorney.  A power of attorney that covers a wide spectrum of transactions is called a General Power of Attorney.  A GPOA is very powerful and should only be signed after consultation with an attorney. 

Be aware that an agent’s signature on behalf of a principal is as legally binding on the principal as if the principal signed the document themself.  Therefore, it is extremely important for the principal to only give a POA to someone they trust, and to only give them the amount of authority the principal believes is necessary to achieve the principal’s goals.  Powers of attorney are useful tools for soldiers deployed or mobilized in an environment that prevents them from managing their personal affairs to delegate to someone else the authority to do so.  Sometimes family members may need their military spouse to sign documents for them because of a separation due to an unaccompanied tour or advance move.  Anyone, whether actively serving or not, can lose capacity because of an injury or illness.  By giving a trusted person a springing power of attorney, the need for a guardianship action requiring a judge to appoint a conservator to handle your affairs if you become incapacitated can be avoided. 

A third ancillary document involves delegating your authority to accept or refuse the administration of medicine and medical treatment or procedures after the occurrence of certain triggering events.  Known historically as “living wills,” and more recently as “Advance Medical Directives,” such documents give your instructions whether to continue or refuse certain treatment and medical procedures needed to prevent death and sustain your life when you become incapable of expressing that desire yourself. 

To speak with an attorney in the Fort Bliss Legal Assistance Office (LAO) on this or any other topic, please schedule an appointment by emailing usarmy.bliss.hqda-otjag.mesg.bliss-legal-assistance-office@army.mil, or calling (915) 568-7141 during LAO business hours.