Sometimes the most difficult conversations to have are the most important, like helping your loved ones be prepared for when you die. Talking to your family about this topic beforehand is a way to show that you care, and it will help to ease the financial burdens they may face. Following are 6 things you should brief your beneficiaries on:
First. Make sure you understand what an (AOP) beneficiary is and the nature of the benefit to which they are entitled.
Second. Tell your beneficiaries who they are! Hopefully, you’ve designated your beneficiaries for any (AOP) that may be due. When no beneficiary is named, the payment is made to the highest person in what is known as the “Order of Precedence.” The Order or Precedence is the federally mandated order of inheritance that applies to legacies without a designated beneficiary.
Third. Let your beneficiary know that sometimes money that has already been deposited into your checking account needs to be returned to DFAS. Military retired pay is only payable for as long as you are alive. Entitlement to your military retirement ends when you die.
Fourth. Tell your beneficiaries what documents they will need to send in to make their claim. One copy of the death certificate that includes the manner of death needs to be sent to us. Also, each beneficiary should complete a Claim for Unpaid Compensation (SF 1174).
Fifth. Let your beneficiaries know that sometimes there is no money due. Each situation is different. It depends how up to date the account was kept. You can make sure your account is in good standing by performing a yearly audit.
Sixth. When an arrears payment is made, there is a statement on the check that reads, “Retired Pay Payable only during life of Payee.” Please do not let this statement alarm your beneficiaries. As long as the beneficiary’s name is accurate on the check, the check can be cashed.
