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Veteran’s Aid + Attendance Planning

Planning for Seniors with Existing Life Insurance

The Veterans Administration does not have a specific benefit for community based long-term care.  However, the VA does provide a minimum income level or VA Pension for all veterans who require the aid and attendance of another for assisting in the activities of daily living.

VA Pension?

Pension is a benefit paid to wartime veterans with limited income, and who are permanently and totally disabled or age 65 or older.  This is a pension benefit so it is for the life of the veteran.

Who Is Eligible?

You may be eligible if:

  • you were discharged from service under other than dishonorable conditions, AND
  • you served 90 days or more of active duty with at least 1 day during a period of war time*, AND
  • your countable family income is below a yearly limit set by law, AND

  • you are permanently and totally disabled, OR
  • you are age 65 or older.

*Note:  Anyone who enlists after September 7, 1980, generally must have served at least 24 months or the full period for which called or ordered to active duty. Service from August 2, 1990 to present is considered to be a period of war (Gulf War) in addition to other periods of war such as World War II, Korea, and Vietnam.

How Much Does VA Pay?

The VA will pay as much as $2,229 per month or $26,748 per year for a Married Veteran and up to $1,208 per month or $14,496 per year for the surviving Spouse of a Veteran who needs the aid and attendance of another.  The benefit amount is dependent upon an asset and income test and the amount of unreimbursed medical expenses the Veteran or spouse may have.  The benefit is paid in 12 equal monthly payments rounded down to the nearest dollar.

How Do I Qualify?

To qualify medically, a War-Time Veteran or surviving spouse must need the assistance of another person to perform daily tasks, such as eating, dressing, undressing, taking care of the needs of nature, etc. Being blind or in a nursing home for mental or physical incapacity, or residing in an assisted living facility also qualifies.  Eligibility must be proven by filing the proper Veterans Application for Pension or Compensation. This application will require a copy of DD-214 or separation papers, Medical Evaluation from a physician, current medical issues, net worth limitations, and net income, along with out-of-pocket Medical Expenses.

How Can I Start Getting the Veteran’s Aid & Attendance Pension?

Contact our law firm for a FREE initial consultation and one of our VA accredited attorneys will help you.  Let one of our attorneys guide you through the eligibility process so you can qualify for this very important VA benefit.

Do You Need A Veterans Asset Protection Trust

A Veterans Asset Protection Trust (VAPT) can serve a valuable role when trying to divest a claimant of assets in order to qualify for pension benefits.  These trusts can make the difference between a Veteran or Surviving Spouse getting the care they need while preserving their assets, rather than them spending all of their money just to get the care they need.

Some advantages of Veteran’s Asset Protection Trust include:

  1. The trust can hold your assets and residence;
  2. The assets and home in the trust will not disqualify you from VA benefits;
  3. The trust can sell your assets and/ or residence and keep the proceeds;
  4. The proceeds will not disqualify you for VA benefits or Medicaid during your lifetime;
  5. The proceeds from the sale of the residence will not be subject to estate recovery by Medicaid;
  6. The trustee can sell the residence with the grantor (you) still being able to take advantage of Internal Revenue Code § 121 – capital gain exemption (up to $500,000 for married joint filing and $250,000 single); and
  7. At the death of the grantor, the trust assets will receive a stepped-up basis for income tax purposes.

New Look Back Rule

The VA look back rule establishes a period of 36-months (3 years) in which the VA “looks back” on all asset transfers made for less than they are worth. The look-back rule is a huge change from how asset transfers were handled in the past. Previously, there was no VA look back period, nor was there a penalization period for gifting/selling assets for less than fair market value. However, with this new rule, the 36-month look back period begins the date of one’s VA pension application, dating back three years. If one is found to be in violation of the look back rule, a waiting period is the penalty, then benefits may begin.

Exceptions to the Look Back Period

Remember, if a veteran or surviving spouse gifted, sold or transferred assets, but never had net worth over $127,061, he/she will not be in violation of the look back rule. For example, say a veteran has $100,000 in investment assets and establishes a Veterans Asset Protection Trust. This does not violate the VA’s look back rule, as the veteran never had assets over the net worth limit of $127,061. However, say a veteran has $147,000 in assets and moves $20,000 of it to his trust, this is in violation of the look back rule since the veteran initially had more than the $127,061 limit. As a result, his benefits approval will be delayed until the “penalty period” is over.  In the above example it would be 8 months.

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