Veterans and military families often need to plan around two sets of rules. Federal beneficiary forms decide who receives military life insurance and retirement savings. Pennsylvania law governs most other property, including assets that go through probate with the Cambria County Register of Wills in Ebensburg. Silverman, Tokarsky & Forman, L.L.C., drafts wills and trusts for Johnstown families with both sets of rules in mind. This helps prevent conflicts between beneficiary forms and the instructions in your estate plan.
Which Documents Belong in a Military Estate Plan?
A will controls only the property that goes through probate. Servicemembers’ Group Life Insurance (SGLI) and the Thrift Savings Plan (TSP) pay whoever is named on the federal beneficiary form. Because of this, a complete plan usually includes:
- A will written under Pennsylvania law
- A durable financial power of attorney
- A health care power of attorney and a living will
- Up-to-date SGLI and TSP beneficiary forms
- A written record of your burial wishes
In Pennsylvania, a living will takes effect only after a doctor confirms that you have an end-stage medical condition or are permanently unconscious. Naming a health care agent lets someone make medical decisions for you in other situations, such as a serious illness you are expected to recover from.
Does Divorce Remove an Ex-Spouse From SGLI and TSP Forms?
No. Divorce does not remove a former spouse from these federal forms. Pennsylvania law generally cancels an ex-spouse’s beneficiary designation on many other accounts after a divorce.
However, federal law overrides that rule for SGLI and the TSP. If you do not update the form, the money can still go to your ex-spouse. If there is no TSP beneficiary form on file, the money is paid in a set federal order, starting with a spouse, then children, then parents, then your estate.
Does Pennsylvania Tax Veterans’ Benefits at Death?
SGLI payments and the VA lump-sum death payment are not subject to Pennsylvania inheritance tax. Personal property from a service member who dies from an injury or illness received on active duty is also exempt. However, real estate and ordinary bank accounts are still taxed, and the tax rate depends on who inherits them.
Aid and Attendance Asset Rules
Wartime veterans who need help with daily tasks, such as bathing or dressing, may qualify for an extra Aid and Attendance payment on top of a VA pension. The VA uses financial rules to decide who qualifies, and moving assets too late can cause problems:
- Net Worth Limit: Your assets plus yearly income must stay under $163,699 through November 30, 2026.
- 36-Month Look-Back: Gifts or transfers made in the three years before you apply can lead to a penalty.
- Home Exclusion: Your home and up to two acres of land do not count toward the limit.
Planning years in advance, such as setting up a trust early, can help avoid a penalty. Waiting until a nursing home bill arrives often leaves fewer options.
What Deployment and Burial Details Do Families Overlook?
A military power of attorney signed under federal law before deployment is valid in Pennsylvania without meeting the state’s usual signing rules. Keep it with your DD-214, the document that shows your military discharge. Pennsylvania’s national cemeteries include Indiantown Gap National Cemetery and the National Cemetery of the Alleghenies near Pittsburgh. Getting a VA pre-need eligibility decision ahead of time can reduce the paperwork your family has to handle while planning a funeral.
Build an Estate Plan That Works With Federal and State Rules
Our estate planning and veterans benefits attorneys work together on your plan, so beneficiary forms, inheritance tax, and pension eligibility are reviewed at the same time. Our firm has served families in the Laurel Highlands since 2000. Call (814) 536-8600 or schedule a consultation online.
