Pending Legislation May Change Veterans Service Pension Benefits
Congress has a few pending law changes that may affect Veterans Service Pension Benefits. Current regulations do not penalize veterans for making gifts or other transfers of their assets any time prior to their application for veterans service pension benefits. Two years ago the Senate received a report that indicated the system was being abused by some applicants. Most elder law attorneys have long been concerned about annuity salesmen (and some attorneys) who market themselves as veterans benefits advisors in order to sell expensive and sometimes inappropriate products to veterans.
Our elder law attorneys in Chapel Hill help aging individuals preserve eligibility for government benefits, like Medicaid and Veterans Benefits, which may include the use of special trusts in appropriate situations. If the proposed legislation is passed into law, those who apply for Veterans Benefits may face a period of ineligibility for making gifts or transferring assets, including gifts to family members and transfers to some trusts, annuities, and other financial products or investments. Under the proposed requirements: Individuals who have transferred assets during the 36 months prior to their application for Veterans Benefits may be ineligible for benefits.
How long will those individuals be ineligible for Veterans Benefits? The ineligibility period is capped at 36 months, unless the resulting number in the formula below is less:
Total Value of Transferred Assets / Base Amount Veterans Benefits Applicant Qualified For
(Ex. If an individual transferred $100,000 and qualified for $1,038, they would not face a 96-month penalty since the cap is 36 months. However, an individual who transfers $25,000 with the same qualifications, would only be ineligible for 24 months.)
When does the ineligibility period start? The month assets were transferred.
These new requirements will go into effect one year after the President signs the bill—and that is if he signs the bill. Time is of the essence for Veterans interested in effectively preserving their assets and eligibility without consequences. Review options with a North Carolina elder law attorney as soon as possible.
TrustCounsel’s Chapel Hill estate planning and elder law attorneys Gregory Herman-Giddens and Kristin Burrows present “A Lawyer’s Perspective: Financial and Legal Strategies and Planning, and Assistance Paying for Long-Term Care” at the Senior Center in Pittsboro, North Carolina on March 4, 2014. The workshop is provided in coordination with the Chatham County Council on Aging.