VA Q & A

What steps do I need to take to make sure my ex-spouse does not inherit from me if I am the first to die? Is the final divorce order enough?

Just when you think the pain and stress of a divorce is behind you there is one more thing to do. You definitely need to update your estate planning documents and beneficiary designations.  

Reviewing and updating your beneficiary designations is extremely important. All life insurance policies, retirement accounts, annuities, pension benefits, and any transfer on death or payable on death designations should be reviewed and updated. These accounts are considered “non-probate” assets and are not controlled by your Last Will and Testament.

If the divorce settlement requires you to maintain your ex-spouse as the beneficiary of  a policy or retirement account, you are required to comply with the terms of the court order. 

Will there be any changes to the gift tax amounts for 2017?

The annual exclusion amount will remain $14,000 per person in 2017. This is the amount an individual is allowed to exclude from taxable gifting of present interests to any one recipient during that year. However, the annual exclusion amount for non-citizen spouses will increase from $148,000 in 2016 to $149,000 in 2017.

The exclusion for unified credit against estate tax over a lifetime will increase from $5,450,000 in 2016 to $5,490,000 in 2017. 

Can you explain the difference between VA pension and Disability compensation?

A. Service Connected disability compensation is a benefit paid to Veterans for disability that either:

  1. Arose during service
  2. Was worsened or aggravated by service
  3. Is presumed by VA to be related to military service

Veterans who served either in war or peace are entitled to disability compensation if they were discharged under conditions other than dishonorable, their disability was incurred in the line of duty and the disability is not a result of their own willful misconduct.  Any disability incurred or aggravated during that at time frame is compen-sable.  

A Veterans non-service connected Pension is a means-tested benefit. The VA uses a formula type approach for eligibility based on age, life expectancy, income, assets, and unreimbursed medical expenses.  

To receive either benefit you must meet eligibility requirements and apply for the benefit.  

What is a presumptive service condition?  

The VA presumes that specific disabilities diagnosed in certain veterans were cause by their military service. VA does this because of the unique circumstances of their military service. If one of these conditions is diagnosed in a veteran in one of these groups, VA presumes that the circumstances of his/her service caused the condition and disability compensation can be awarded.  

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