Losing a loved one is always difficult, but when that loved one is a veteran, there are often additional layers of complexity in managing their estate. Military families face unique concerns during the probate process, especially when it comes to veterans’ benefits, handling VA loans, and navigating estate considerations that may not apply to non-military families.
As a probate realtor with experience working with military families, I understand these challenges and the importance of honoring the service and sacrifices made by your loved one. In this blog post, I’ll guide you through some of the specific issues that can arise during probate when the deceased was a veteran, and how to approach them with confidence and care.
1. Understanding Veterans’ Benefits in Probate
Veterans often qualify for a range of benefits, some of which may impact the probate process. These benefits might include pensions, life insurance policies, and burial benefits. It’s crucial for the personal representative or executor of the estate to understand which benefits are available and how they affect the estate’s assets.
- Survivor Benefits: If the deceased veteran’s spouse or dependents are entitled to survivor benefits, this must be factored into the estate. These benefits can help ease financial burdens, but they may also involve paperwork or applications through the Department of Veterans Affairs (VA) that the executor will need to manage.
- VA Life Insurance: Many veterans hold life insurance policies through the VA, such as the Servicemembers’ Group Life Insurance (SGLI) or Veterans’ Group Life Insurance (VGLI). The proceeds from these policies do not go through probate, as they are typically payable directly to beneficiaries. However, it’s important for the executor to ensure these claims are filed properly.
- Burial and Funeral Benefits: Veterans are often eligible for burial in a national cemetery and may receive allowances for funeral expenses. These benefits can reduce the financial burden on the estate but must be applied for in a timely manner. In addition, some families may wish to incorporate military honors or specific burial traditions, which should be communicated to the executor.
2. Handling VA Loans in Probate
One of the most common questions I get from military families dealing with probate real estate is, “What happens to the VA loan?” Veterans who used their VA loan benefit to purchase a home have special loan terms that differ from conventional mortgages. When a veteran passes away, managing this loan becomes a crucial part of the probate process.
- VA Loan Assumption: VA loans are assumable, meaning that a qualified individual (such as a surviving spouse or another family member) can take over the loan, maintaining the same interest rate and terms. This can be a significant advantage compared to refinancing or obtaining a new mortgage. However, the person assuming the loan must meet the VA’s credit and income requirements.
- Selling a Home with a VA Loan: If the estate decides to sell the home, the VA loan will typically be paid off at closing, just like any other mortgage. The challenge arises if the home’s value is less than the remaining balance of the loan, especially in cases where the property may need repairs or is located in a weaker real estate market. In such situations, the estate may consider negotiating a short sale, but this requires approval from the VA.
- Restoring the Veteran’s Loan Entitlement: If the home is sold and the loan paid off, the veteran’s loan entitlement can be restored, allowing surviving spouses or other family members to use the benefit in the future. This can be an important consideration for military families looking to maintain their housing benefits.
3. Estate Planning and Special Considerations for Military Families
Military families often face unique estate planning needs due to frequent relocations, deployments, and the benefits veterans receive. When a veteran passes away, these factors can complicate the probate process. It’s important to have a plan in place to address these challenges:
- Multiple Properties Across States: Military families are frequently relocated, which can mean the deceased veteran may have owned properties in different states or regions. This situation adds complexity to the probate process, as multiple jurisdictions may be involved in settling the estate. Working with an experienced probate attorney and realtor who understand these dynamics can help simplify the process.
- Handling Military Retirement Benefits: If the deceased veteran was receiving military retirement pay, the executor must notify the Defense Finance and Accounting Service (DFAS) to stop payments and potentially apply for survivor benefits. Unpaid retirement pay earned before death becomes part of the estate and will need to be distributed according to the will or state law.
- Personal Property with Sentimental or Military Significance: Many veterans’ personal belongings, such as medals, uniforms, or military memorabilia, hold significant sentimental value. It’s important to handle these items with care, ensuring that they are passed on to family members according to the wishes of the deceased or through clear communication among the heirs.
4. Working with a Probate Realtor Who Understands Military Needs
When a veteran’s home is part of the estate, working with a realtor who understands the unique aspects of military life and veterans’ benefits can make the probate process much smoother. As a probate realtor who has assisted military families, I know how to handle VA loans, communicate with military lenders, and manage the specific needs that come with these properties.
Some of the services I offer to military families include:
- Market Expertise: I will help you determine the best course of action for the veteran’s property, whether you are considering selling it, renting it, or transferring it to a family member.
- VA Loan Guidance: Navigating the complexities of a VA loan in probate can be challenging, but I can guide you through the process of assumption, short sales, or simply selling the home.
- Coordinating with Military Legal Services: If your family has access to military legal services or a Judge Advocate General (JAG) attorney, I can work alongside them to ensure that the probate real estate process is handled in alignment with military-specific legal needs.
Probate real estate is never easy, and when the deceased was a veteran, it can introduce a range of unique concerns that require thoughtful handling. From managing VA loans to understanding survivor benefits and handling military-specific personal property, there are many factors that set probate for military families apart.
As a probate realtor with experience in these matters, I’m here to help guide you through the process and ensure that the real estate side of probate is managed with the utmost care and respect for your loved one’s legacy. If you’re facing probate as part of a military family, don’t hesitate to reach out to discuss how I can assist you.