Estate Planning
Q: Where
should I keep my Will?
A: The
originals of your Will and any trusts should be kept in a
safe place. In most cases, your family will need your original
Will to begin the probate process. Therefore your close family
members should know the location. In many states you can file
your Will with the court for a small charge. If you do file
your Will, it is a good idea to mark a copy with the location
of the original so that your family will know where the original
is located. For information, see Estate Planning/Wills.
Q: Can
I change my Will by crossing through some language and initialing
the change?
A: No,
it is very important that you NEVER make any marks on your
Will. Marks on a Will may cause the Will to be revoked. If
you want to change your Will, see the JAG officer about a
Codicil (amendment) or new Will. For information, see Estate Planning/Wills.
Q: My girlfriend
and I are buying a house together. How should it be titled?
A: That
depends on whether you want your share to pass to her at your
death or whether you want to indicate in your Will who inherits
your portion of the house. If you own the house jointly (with
survivorship), your Will will have no effect over the ownership
at your death. For information, see Estate
Planning/Wills.
Q:
Where should I indicate where I want to be buried and the
type of funeral I want?
A: This
information is usually best discussed with your family. One
good idea is to write a personal letter to your family, describing
the type of service you would like and where you wish to be
buried. If you are uncomfortable discussing these details
with your family now, perhaps you could write the letter and
mark the envelope, "To Be Opened in the Event of My Death."
Tell a trusted family member that you have written the letter
and its location so that it is located immediately after your
death.
Insurance
Q: True
or False? All life insurance should be called death insurance,
because I get no benefit if I live and my beneficiary gets
all the benefits, only after I die.
A: False.
Whole life insurance is designed with a "savings element,"
known as cash value, which is available to you while
you are alive to take if you terminate the plan, or borrow
against without terminating the plan, or allow you to buy
a reduced amount of paid-up life insurance, or to buy the
full face amount of the coverage for a reduced period of time.
These provisions in the policy are also known as nonforfeiture
provisions. For more information, see Ordinary
Life Insurance.
Q: True
or False? I have no need for life insurance since no one I
know is dependent on any assets I have or income I generate.
A:True.
For more information, see Life
Insurance.
Q: True
or False? The Veterans Administration provides relatively
inexpensive life insurance to veterans after they separate
from the service.
A:True.
For more information, see Life
Insurance.
Q: True
or False? I live in an area that floods every now and then.
My regular homeowners policy pays no benefit if a weather-related
flood damages my house.
A:True.
To be eligible for federally backed loans, you must buy national
flood insurance if you live in such an area, known as a special
flood hazard area. For more information, see Flood Insurance.
Q: True
or False? Flood damage to my car is covered by my automobile
insurance policy.
A:True.
For more information, see Automobile Insurance.
Q: True
or False? A personal umbrella policy will cover me for damages
caused by heavy rains that are not covered by my homeowners
or automobile insurance policies.
A:False.
A personal umbrella policy will cover you for claims in excess
of what your homeowners or automobile insurance policies pay
above certain minimum coverage required by the umbrella policy
in the underlying policies. For more information, see Personal
Umbrella Coverage.
Q: True
or False? I was activated on March 13, 2003. My family won't
be eligible for TRICARE Prime until I have served for at least
six months.
A: False. You are
eligible for TRICARE Prime as of March 13, 2003, if you are
still active one month after activation. For more information,
see
the Tricare website: http://www.tricare.osd.mil.
Q: True
or False? My family lives 51 miles away, and they no longer
live with me. Therefore, they are not eligible for TRICARE
Prime Remote when I am activated.
A: False. Your
family members no longer have to live with you (their "sponsor")
to receive benefits. For more information, see the Tricare website: http://www.tricare.osd.mil.
Q: True
or False? If I am sued at my base quarters as a result of
my own negligence, I don't need renters' insurance because
the armed service covers that liability for me.
A: False.
While JAG may offer advice on defending yourself, the base
offers you no liability protection if you are deemed negligent.
You may need not only liability protection under your renters'
policy, but also personal umbrella policy protection. For
more information, see Property
Insurance Protection Provided by the Military.
Planning
Q: Do I
have to use the net worth and cash flow charts provided on
the site?
A: No,
these are provided to help you develop your own personalized
documents. The best thing to do is print these out and draft
a new one, with your specific assets/liabilities and income/expenses
on an Excel spreadsheet. For more information, see Family Budget—Cash
Flow Statement.
Q: My Social
Security Number is printed on my military ID—are you telling
me that I should not have it? I need it! I'm confused
…
A: Although
most, if not all, military personnel are very diligent about
the security of their military IDs, many people also carry
their original Social Security card in their wallet or purse.
You should not have this card on your person. For more information,
see Identity Theft.
Q: My chief
told me that I should not cash my paycheck at one of those
check-cashing places. Why not? They give me cash immediately.
A: The
problem with those places is that they charge you a high fee
(or interest rate) for cashing your check. When you purchase
gasoline, would you like it if the station charged you an
extra 10 cents per gallon for your service? Also, because
your military paycheck is guaranteed, there is no chance that
your check is fraudulent. You should cash your check only
at your local bank or credit union. For more information,
see Checking/Savings Accounts.
Q: I completed
your net worth chart and I have a negative number—does that
mean that I should file for bankruptcy?
A: No,
you probably have a negative net worth because you do not
have any tangible assets (house, property, investments). Your
assets probably consist of money in your checking account
and your car. Don't worry—many young people are in this situation,
whether you're in the military or in college. The key is to
understand how to obtain those assets. This Web site will
guide you in making the right decisions. For more information,
see
Building a Budget.
Q: You
list two different financial planning software tools; which
one is better?
A: Both
are listed because they are about the same in their financial
planning approach and tools. If you have more experience with
Microsoft-type products, then Microsoft Money would
be easier to use; if not, then Intuit Quicken may be
easier. Please note that it takes time to fully understand
the software, but once you get the hang of it, the tools should
provide you with excellent information on your personal finances.
For more information, see Financial
Planning Software.
Debt
Q: Should
I buy or lease my first car?
A: That
depends on where you are going to use the car and how much
you plan to travel. Leasing is beneficial if you like to have
a new car every three years and you do not put a lot of miles
on it. Leasing companies restrict the amount of "wear
and tear" and the mileage (annual amount; usually fewer
than 12,000 miles) on the car. If you do decide to lease,
ask a lot of questions and understand all of the fees.
For more information, see Buy or Lease?
Q: I don't
like dealing with car salespeople, but I need a new car—are
there any alternatives?
A: You
can shop on the Internet with car-buying services. They will
locate the car you want and negotiate the price with the dealer.
The problem is that you can usually get a better deal, including
financing, by doing the work yourself. Take along a friend
or family member who has experience purchasing cars; this
person is looking out for your best interest, and they do
not have any problem walking out the door. For more information,
see Negotiating
the Deal.
Q: Should
I always go with a VA loan when buying a home?
A: No, but it's
usually the best place for military personnel to start. Their
acceptance levels are more liberal, and they have lower fees.
Go ahead and shop around, but don't contact more than three
mortgage companies. For more information, see Mortgages.
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