The following is an urgent message that could impact you or a loved one.
There are significant changes to the VA pension program. It is commonly referred to as aid and attendance. VA pension is a monthly cash benefit available to wartime Veterans or surviving spouses of wartime Veterans who have limited income and assets and are in need of care.
On September 18, 2018, the Department of Veterans Affairs (VA) amended the rules regarding eligibility for VA pension. These new rules have drastically changed VA pension planning. One area the new rules significantly effects is the use of annuities and trust-based crisis planning. The stated purpose of the proposed change was to “maintain the integrity of the pension program and to implement recent statutory changes” and to “respond to recent recommendations made by the Government Accountability Office (GAO), to maintain the integrity of VA’s needs-based benefit programs, and to clarify and address issues necessary for the consistent adjudication of pension and parents’ dependency and indemnity compensation claims. The changes are quite comprehensive and touch on a number of areas including net worth, asset transfers, medical expenses and income deductions
Some of the rules that will go into effect on October 18, 2018 are:
- Transfers of assets will be subject to a look-back period of 36 months when applying for pension benefits for wartime Veterans, their surviving spouses and dependent children of wartime Veterans. The penalty period for a transfer is capped at 5 years.
- After October 18th, any asset that was transferred for less than fair market value within the 36 months prior to application will trigger a penalty period. If a penalty period is imposed, the applicant’s benefits will be adversely delayed.
- There is now a bright-line rule regarding the amount of assets that a Veteran can own and still be approved for needs-based benefits. This asset limit is currently set at $123,600.00, and will increase each year.
The good news is there is still time to apply for VA pension benefits under the current rules! Any assets transferred before October 18 willnotbe subject to the 36 month look-back period or penalty period rules. Nor will the asset limit be applicable. While the new rules make it impossible to do crisis planning, they do not make it impossible to do proactive planning.
If you are in need of the benefits provided by this program, it is extremely important to pursue VA pension benefits beforeOctober 18, 2018. I urge you to contact my office immediately if you or someone you know could possibly qualify for VA pension benefits.
For more information regarding all of the changes, click here for a comprehensive whitepaper.
If you would like further information or assistance getting your estate planning affairs in order, please contact Euless, Texas Estate Planning and Elder Law Attorney, Antoinette Bone, at (817) 462-5454 or email [email protected].
To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.
Nothing in this message is intended to provide legal advice. This message is for educational purposes only.