Get finances in order before war deployment

By Sandra Block
USA Today

In October 2001, Dan Bredeson moved to San Antonio to work for USAA, a financial services company. After just one week at his job, he was notified that his Air Force Reserve unit had been activated in response to the Sept. 11 attacks. He was gone for eight months.

Now, Bredeson, 34, just learned that his unit has been placed on high alert for deployment. If activated, he'll join more than 110,000 National Guard and other reserve forces serving around the world in preparation for possible war. In the next few weeks, the number is expected to rise to 180,000.

Along with the emotional toll, deployment can create financial hardships. Bredeson's employer, which provides financial services to military families, made up the difference between his salary and military pay. Not all companies do.

If you're facing deployment, it's important to get your finances in order now. Here are some steps you can take:

Taxes

• The IRS Volunteer Income Tax Assistance program offers free help at bases around the United States and recently added overseas bases, says Margaret Warren, a development director at the Internal Revenue Service.

TaxSlayer, an Internet tax preparer, is offering free electronic preparation and filing for military people on active duty. You can find it at www.taxslayer.com.

Life insurance

• All active-duty military people, including reservists, are covered for up to $250,000 by the Servicemembers' Group Life Insurance program. You can find more information at www.insurance.va.gov.

If you have a private policy, which can provide additional coverage, make sure it doesn't contain a war clause. Some policies won't cover deaths from war or combat.

Banking and debt

• Take advantage of the Soldiers' and Sailors' Civil Relief Act to lower interest rates on your debt. The federal law is designed to help reservists and members of the Guard who suffer financial hardship while on active duty.

Lenders are required to cap interest rates on outstanding loans at 6 percent. The law only covers loans issued before deployment. Its provisions also make it more difficult for mortgage lenders to foreclose if you fall behind. For more details, see www.military.com.

• Consider setting up automatic bill payment from your checking or savings account.

Estate planning

• Assign power of attorney. It enables someone else to make financial decisions in your absence. You can revoke it when you return.

• Be sure to update your will.