Understanding the Probate Process, Survivor Benefits and Resources for Financial Planning
Current as of May 15, 2020
While no actions can erase the pain you feel after losing a family member or loved one, getting your financial and legal affairs in order can be a small step in the right direction and can provide some peace of mind during this difficult time.
Here are a few essentials to consider as you address financial and legal affairs in the days following the death of a loved one.
Understanding the probate process
When your loved one dies, the probate process will begin in the county of their legal residence at the time of death. If your loved one had a will, the person they named as the executor will take charge of finalizing his or her affairs. If there isn't a will, the court will appoint an administrator. With or without a will, the probate process can be divided into four steps. Here's what you can expect to happen.
Step 1: the probate hearing
- The judge formally appoints the executor or administrator to be the personal representative throughout the probate process.
- The validity of the will is established and the court issues an order "admitting the will to probate," which causes the will to become public record.
- The personal representative is given a document, called the "letters of administration" or "letters testamentary," that grants him or her the full authority to deal with the decedent's probate property and accounts.
Step 2: collection and inventory of assets
The designated personal representative takes an inventory of the estate assets and files this inventory with the court. These assets may include money owed to the decedent or the estate, bank and stock brokerage accounts, and evaluations of real estate or property.
- Money owed to the decedent or the estate includes loans, a final paycheck, life insurance payouts or retirement account(s).
- Bank and stock brokerage accounts includes account numbers and latest balances.
- Evaluations of real estate or property will probably require a professional appraisal.
Step 3: bills, taxes, expenses and creditors
- Any final bills, debts, taxes or claims against the deceased are reviewed for their validity and then paid with funds from the estate. You are not personally responsible for paying these expenses out-of-pocket, even if estate funds are not available.
- Once all debts and bills are paid, the personal representative files a report with the court to account for all income received and payments made on behalf of the estate.
Step 4: formal transfer of remaining estate property
- The remainder of the property is distributed as the will directs or according to state law if there isn't a will.
- Depending on the state, there may be a state-required waiting period before property can be officially sold or transferred, which is usually six months.
- Once all remaining estate property is transferred to heirs and beneficiaries, the personal representative completes a final settlement of the estate that details all dealings.
- The judge then approves the final settlement and the personal representative's duties are complete.
If you need more information on the probate process, contact your local legal assistance attorney. You can find legal assistance offices through the Armed Forces Legal Assistance website.
The Department of Defense and other agencies are committed to doing everything possible to assist you as you deal with the financial details and decisions that surround the death of an active-duty service member. Every service member’s family may be eligible for certain benefits, such as:
Death gratuity: Death gratuity is a lump-sum payment made by the Department of Defense to the survivors or other individuals identified by the service member prior to his or her death while on active duty, active duty for training, inactive duty for training or within the 120 days of release from active duty if the death is due to a service-related disability. The amount of death gratuity is $100,000 and is tax exempt.
Servicemember’s Group Life Insurance, or SGLI: Upon the death of the service member, SGLI payment is made by the Office of Servicemembers’ Group Life Insurance.
Survivor Benefit Plan, or SBP: Surviving spouses or children of service members who die in the line of active duty may be entitled to SBP payments. The automatic monthly SBP death benefit is provided at no cost, as service members do not pay into this benefit when on active duty.
Student eligibility for military SBP: The SBP’s child annuity payments typically end when recipients turn 18. You are eligible to continue receiving payments until the end of the school year during which you turn 22, as long as you remain unmarried and you attend one of the following full time:
- High school
- Accredited trade school
- Accredited technical school
- Accredited vocational institute
- Accredited college or university
The certification process has gotten easier for students age 18 and older covered as a child annuitant under the military Survivor Benefit Plan.
The changes went into effect in May 2020, highlighted by the following:
- A simpler certification form
- A student’s ability to self-certify
- An extension of the certification deadline to annually instead of each term/semester
SBP annuity payments for qualifying high school and college students are not affected by school closures in the wake of coronavirus disease 2019.
The DOD simplified the process of students becoming certified in other ways, including:
- Students will now self-certify. So they will no longer need a school official’s signature or school documentation when they certify full-time attendance. With COVID-19 school closures, this truly simplifies the process.
- Simpler Child Annuitant’s Certification for Previous Attendance Letter for certifying past attendance.
The Defense Finance and Accounting Service details the new certification process on their website, including all the changes. Make sure to complete the updated Child Annuitant’s School Certification form.
The DOD is taking steps to make it easier to validate each student’s eligibility with an online option for uploading and submitting school certification forms. Use the AskDFAS online upload tool.
Dependency and Indemnity Compensation, or DIC: This compensation will probably be the most important part of an eligible survivor’s long-range financial planning. It is paid to eligible survivors of active-duty service members and survivors of those veterans who deaths are determined by the VA to be service-related.
Assistance from the Social Security Administration: Monthly Social Security payments are paid to a spouse or a divorced spouse with children of the deceased service member under the age of 16, or disabled before the age of 18. The amount paid will be determined by the Social Security Administration.
Using your online survivor benefits report to set financial goals
The online survivor benefits report (PDF), allows you to view current and estimated future benefits, and set up savings and spending plans so you can forecast your financial future. Some useful features include:
- The “what ifs”: See how different scenarios, such as changes to marital, education and disability status, will impact your current and future benefits. For example, if a spouse remarries before age 55, the Survivor Benefit Plan annuity is suspended, but can be reinstated if the remarriage ends by death or divorce. If the surviving spouse remarries at age 55 or older, the annuity continues uninterrupted for the duration of the spouse’s life. Current and “what if” reports can be saved or printed.
- Homeownership possibilities: Look at your current finances and your financial future and decide if, or when, you should buy a home. Surviving spouses who have not remarried may be eligible for a Department of Veterans Affairs home loan guaranty, which they can use to buy a home, build a home or refinance an existing loan. Additional information about the VA home loan program is available on the VA website.
- Education benefits: Whether you’re thinking about your own education or your child’s, the interactive report can help you financially plan for obtaining higher education, certification, technical or vocational school, apprenticeships or other educational programs. As a surviving spouse, you may access education benefits from the VA up to 20 years after the death of your service member. Surviving military children can typically use their benefits between the ages of 18 and 26.
- Retirement options: Your report will show you how much money you should be receiving now and project your future benefits. That can help you decide how much money to set aside now for your retirement years.
Start preparing for your future by accessing your online survivor benefits report, available 24 hours a day, 365 days a year. To log in and view personal reports, select your loved one’s branch of service below and follow instructions on the site:
If you don’t already have a Premium DS Logon account you can create one on the DMDC’s website. Meanwhile, Military OneSource also offers financial counseling and can help you with financial- or benefits-related questions. Call 800-342-9647. OCONUS/Overseas? Click here for calling options.
Contact the family assistance support team at 877-827-2471, or by email at email@example.com, about any questions concerning your report. Recipients of Servicemembers’ Group Life Insurance are entitled to a lifetime of free financial advice from FinancialPoint, an independent company whose team of professionals are experts in handling a wide range of financial matters on behalf of the VA.
Long-term survivor care programs
The services’ long-term survivor care programs also provide free services with financial counselors, as well as Military OneSource: