Bill allows service members more leeway for death gratuity - Marine Corps Money | Marine Corps pay, pay charts - Marine Corps Times

Bill allows service members more leeway for death gratuity

Congress has opened a broad, temporary window that lets service members decide who would get up to half of the $100,000 death gratuity if they die on active duty.

The wartime supplemental funding bill for 2007, signed May 25 by President Bush, contains a provision that allows service members to designate “another person” to get up to 50 percent of the death gratuity, in 10-percent increments.

The wartime funding bill’s authority expires with the end of the fiscal year on Sept. 30, but legislation to make the change permanent is moving through Congress and has already been passed by the House.

Even if a service member has a surviving spouse — normally first in line for the payment — the member could designate someone else to receive half the $100,000.

Troops are not required to act; if they do nothing, the entire payment would go to the primary next of kin under the standard order of priority set by law — spouse first, then children in equal shares, then parents or siblings.

Previously, any payment of the death gratuity to minor children had to be placed in trust until they turned 18. But that has created financial hardship for some family members, mainly grandparents, who unexpectedly assumed custody of orphaned military children — and led to the proposed change in the law.

“Allowing up to $50,000 to go to someone who would care for the child does give a caregiver more flexibility,” said Kathy Moakler, director of government relations for the National Military Family Association.

She and others have noted that service members have the ability to provide money to caregivers through the Servicemembers’ Group Life Insurance program, which allows them to designate numerous beneficiaries.

“This allows service members to have a little more control over their estate planning,” she said of the change in law governing the death gratuity.

The gratuity, created in 1908, was originally designed to cover a family’s short-term burial, funeral and other costs associated with the death of a service member until other survivor benefits kicked in.

The new law does not require that the money be used to benefit a deceased service member’s children, which has some concerned.

“The death gratuity should go to someone who is dependent on you for support,” said retired Navy Cmdr. Wayne Johnson, an attorney who worked as a contractor in the Army’s Casualty Assistance Office in 2004 and 2005.

A service member may designate money to someone, assuming that person will be rearing the child — but the child may not end up in the legal custody of that person, Johnson said. If not placed in some form of trust account for the child, the money also could be subject to seizure by the designated person’s creditors, Johnson said.

But, he said, the fact that the law allows the service member to control only 50 percent of the gratuity “makes it easier to swallow.”

And it could be highly beneficial in some scenarios, he noted. For example, a single member with no spouse or children wants the money to go to a fiancé rather than a parent or sibling.

Lillian Rentschler, 58, whose son George, an Army staff sergeant, was killed in Iraq on April 7, 2004, said service members should be offered sound legal and financial advice when making such complex decisions.

She is now the legal guardian of her grandson, Scott, 15, who lived with his father, stepbrother and stepmother before his father was killed. After the death, the family agreed that Rentschler would become Scott’s legal guardian.

Scott received no part of his father’s death gratuity or life insurance; both went to the stepmother, who has bought Scott clothes and other items from time to time, Rentschler said.

Rentschler has had to leave retirement to go back to work to support herself and her grandson.

She lives in Louisville, Ky., and gets about $1,300 a month in government benefits on behalf of Scott, but her funds are still limited and she can’t do all she’d like for him, she said. She has had extra medical and dental expenses for him, as well, including about $7,000 in dental expenses that Tricare will not cover.

Gail Kriete of St. Louis became the legal guardian of her granddaughter, Taylor, 9, before Taylor’s father, a Marine, deployed to Iraq. He paid about $360 a month in child support. Kriete’s daughter never married the father; after he was killed in 2005, his death gratuity went to his wife at the time.

Kriete gets about $1,000 in death benefits on behalf of Taylor, “for which I am very grateful,” she said.

For the past two years, she and Taylor have received donations through the Tragedy Assistance Program for Survivors (TAPS) to attend the group’s annual Memorial Day conference, because they couldn’t afford it on their own.

“To be able to pay for that ourselves would be nice,” she said.

Death gratuity

Purpose: The military “death gratuity,” created in 1908, was designed as a financial bridge for a deceased service member’s family between the time a member’s pay stopped and other government death benefits began. It is generally paid within 72 hours of death.

Amount: For decades, the gratuity was $3,000. In 1991, that was raised to $6,000, then raised again in 2003 to $12,000 and indexed to increase each year by the same percentage as the annual basic pay raise. As part of the fiscal 2006 Defense Authorization Act, Congress raised the payment to $100,000.

Who qualifies: Service members who die while on active duty or while performing authorized travel to or from active duty; reservists who die while on inactive duty training; and in certain other cases. It also applies to those who die within 120 days after discharge or release from active or inactive duty, if the death results from an injury or disease incurred or aggravated during duty, or travel to or from the duty.

Who gets it: The order of priority of the living survivor who will receive the death gratuity is set by law. If an eligible survivor dies before the active-duty member, then it goes to the next living survivor or survivors on the list. Under a new law enacted May 25, this priority order will not change for at least half of the money, but service members can designate any person to receive the other 50 percent. The priority order:

•Surviving spouse.

•Children in equal shares (includes legitimate children, adopted children, stepchildren who were part of the household at the time of death, and illegitimate children with certain conditions of proof).

•If there is no surviving spouse or children, a member may choose to have the payment go to any combination of parents, persons acting as parents (in loco parentis), brothers and sisters. If a service member without a spouse or children does not designate who the payment should go to, then the priority order is:

•Parents and people acting as parents in equal shares.

•Brothers and sisters in equal shares.