net worth

[pologal1979]

§ 3.276   Certain transfers or waivers disregarded.
 (b) Transfer of assets. For pension purposes, a gift of property made by an individual to a relative residing in the same household shall not be recognized as reducing the corpus of the grantor's estate. A sale of property to such a relative shall not be recognized as reducing the corpus of the seller's estate if the purchase price, or other consideration for the sale, is so low as to be tantamount to a gift. A gift of property to someone other than a relative residing in the grantor's household will not be recognized as reducing the corpus of the grantor's estate unless it is clear that the grantor has relinquished all rights of ownership, including the right of control of the property.


UM,you did not read the whole thing. this means that the gift would have to be to a person who is not a relative of the claimant and lives in the claimants household.  Try again.

whatever else you wrote is just a mish mash of stuff. no sense to it.

end of story.

[jpez]

let me break down the specific statute:

§ 3.276   Certain transfers or waivers disregarded.
 (b) Transfer of assets.
1.For pension purposes, a gift of property made by an individual to a relative residing in the same household shall not be recognized as reducing the corpus of the grantor's estate.

This sentence defines a particular gift. A gift made to a relative who also lives in the same house. The rational behind this a vet husband can't gift to his wife. but also can not gift to a adult child who may also live in the home.

 2. A sale of property to such a relative shall not be recognized as reducing the corpus of the seller's estate if the purchase price, or other consideration for the sale, is so low as to be tantamount to a gift.

This sentence now deals with property that has market value. (unlike cash which is covered in sentence 1.) If a piece of land is given to ' a relative in the home' then it has to be sold at market value or the gift doesn't count

 3. A gift of property to someone other than a relative residing in the grantor's household

Now the focus is off the 'a relative in the home'. read the sentence.  "A GIFT OF PROPERTY". The VA just acknowledged that a gift can in fact take place

 will not be recognized as reducing the corpus of the grantor's estate unless

Now the VA is about to tell you the only condition that makes a gift acceptable by the use of the would 'unless

 it is clear that the grantor has relinquished all rights of ownership, including the right of control of the property.
SO the requirement of a gift being acceptable is giving up control.  oddly enough, that is the legal definitine of a GIFT.

You have interpreted the sentence incorrectly.  
This is the correct grammer:  “A gift of property to someone (break) other than a relative residing in the grantor's household (break) will not

You are doing this:   A gift of property to someone (break) other than a relative (break) residing in the grantor's household will not

Please think about that.  Someone – a stranger – has to LIVE with the Vet to receive a gift!!!!
The third sentence is referring back to the first 2 sentences.  The relative residing in the home.
A gift can be made to: (1)  a relative not residing in the home (2) a non- relative residing in the home (3) a non-relative not residing in the home. As long as total contol is given up by the Vet.
I see now why you are confused.


The correct grammar for what you wish it said is: A gift of property to someone, other than a relative, who is  residing in the grantor's household
For the verb ‘residing’ to apply to the first noun in the sentence ‘someone’,  there has to be the word ‘who’. Otherwise the verb ‘residing’ applies to the noun ‘relative’ immediately  in front of it.

[KarenO]

I'll just never understand why people want the government to pay for their expenses, etc. when they can afford it - whether it's legal or not to transfer money to your kids it's just not morally right.  Geez, if my mom had the money to pay for her ALF I never would have dreamed of applying for benefits.  As it is I have waited a year for benefits, shelling out $1,500 out of my own money every month which has put me in a terrible financial position and debt.   

[jpez]

 Myths about how this program 'should' work, is the exact reason most vets don't and have never applied!  They heard someone state a'myth' about the program and decided that they weren't eligible based on a myth. Not a fact.


I just got of the phone with an attorney who was trained by the VA to teach the accredation class to attorneys. The statute allows specific gifting. period.

********************
Judge Learned Hand (longest sitting Appeals Judge) once wrote in a decision against the IRS, 'the tax payer has a right to advantage of the provisions in the law.'

The VA had a press release in 06-07 that stated
WASHINGTON – The Department of Veterans Affairs (VA) is reaching out to inform wartime veterans and surviving spouses of deceased wartime veterans about an under-used, special monthly pension benefit called Aid and Attendance.
“Veterans have earned this benefit by their service to our nation,” said Secretary of Veterans Affairs Jim Nicholson.  “We want to ensure that every veteran or surviving spouse who qualifies has the chance to apply.”
Nationally , the VA concluded up to $22 Billion a year goes unspent because vets “are completely unaware the program exists.”
Although this is not a new program, not everyone is aware of his or herpotential eligibility.  The Aid and Attendance pension benefit may be available to wartime veterans and surviving spouses who have in-home care or who live in assisted-living facilities.
Many elderly veterans and surviving spouses whose incomes are above the limit for a VA pension may still be eligible for the special monthly Aid and Attendance benefit.
************************************************
That 22 billion is not for 'poor' vets. it's for every vet. I don't see the phrase 'only the poor'.
but I do see the word 'every'
I also see a reference to vets with  incomes above the limits.....
while forums tend to bring out emotions, it is important that someone 'attitude and personal belief system' aren't  used to deny eligible vets their rights.

[KarenO]

You said:  That 22 billion is not for 'poor' vets. it's for every vet.I don't see the phrase 'only the poor'.

It is not for every vet – it is for “every vet that qualifies” - whose income is below a certain level, whose assets are below a certain level and whose medical expenses are at a certain level.  If it was for every vet, you wouldn’t have to prove your income – all you would have to do is prove you are a vet.  Not sure what you mean by reference to “high” income – I don’t see a reference to high income, I see a reference that if your income is above the limit for a VA pension you may be eligible for A&A – you still have to qualify. 

And really, don't presume you know anything about me.  You don't. 

[vetadmin]

Ok, generally I don't get into the middle of folks expressing their opinion as this is afterall a public forum, but I think that between Pologal and Jpez this is enough on this topic.  There is an obvious difference of opinion, but this back and forth is not serviving any real purpose that proves helpful to forum members who are looking for answers.  
If the two of you want to continue the debate, please do so through private emails to one another.

[vbcoder]

Debbie,

I apologize for my little "jabs". I will remove my posts..

[jpez]

done

[vetadmin]

Thank you.

[VSR]

I agree. Set up an irrevocable trust and put all excess money in there. It will put you below the limit and works like a charm. You can the beneficary since you are probably going to be one anyway and they get to receive some aid.

If you get caught for this.  You will be prosecuted.  VA shares information with IRS and SSA.  This is a terrible idea. 

[jpez]

Max,
Please be clear.
what will be the crime that they are prosecuted for?

you said 'If you get caught for this.'   the original posted stated that he would report the irrevocable trust to the VA.

[Drew43920]

You have no idea what you are talking about. You do not understand how the program works.  Let me break it down for you.

Net worth is an entitlement factor for pension.  


*************************************************************************

A PENSION !!!!!!!

If I retire from Kodak and they give me a PENSION do they ask how much money I have in they bank ?

[VSR]

You have no idea what you are talking about. You do not understand how the program works.  Let me break it down for you.

Net worth is an entitlement factor for pension.  


*************************************************************************

A PENSION !!!!!!!

If I retire from Kodak and they give me a PENSION do they ask how much money I have in they bank ?

That is exactly the problem.  The program is called pension, but it is essentially a welfare program to try to make sure that veterans don't end up homeless.

[jpez]

Max,
unless you can state the code for statements you make about net worth, as a employee of the VA regional center , you should refrain from opinionated comments concerning net worth.
What you are doing borders on bullying.
The CODE section starts " 3.276   Certain transfers or waivers disregarded."  Disregarded. Ignored. I really don't understand how that can be anymore clear.

THere is a CLEAR code section that states the LAW. Yet you have stated that you are reporting this post to the Office of Inspector General for review.
You have been asked to state "what you are reporting" but you decline to answer.
Net worth at the time of application is the question. No one here condones fraud. Proper Gifitng prior to an application is not fraud and is not illegal.

Medicaid, thru the counties issues ALL COUNTY WELFARE LETTERS that are used to clear up areas where there is confusion on all types of issues. These are posted to official state webpages for all to see how the interpretation is addressed.  Medicaid manuals are available online to review proceedures.

Medicaid applications ask if money has been given away in the last 5 years because they have code that allows for a look back. That law as been adjusted in 86, 97 and again with DRA of 2005.
If the VA wants to have lookback they can.  Get the law rewritten.  Medicaid ACTUALLY is a welfare program.

Supplemental Social Security has clear rules and proccedures on gifting that can be seen online in their manuals. Because SSI is a welfare program.
Ever program states exact resouse limits. EXTRA HELP for Medicare Part D states $10K, ssi 2k & 3K, QMB, SLMB etc. All programs state the limits

THe VA application asks for net worth of the Vet and his dependent. The application also states that "va cannot pay you if your net worth is sizable." If $80,000 is 'sizable' or not is certainly open for discussion but $75,000 is certainly above all poverty standards  so the pension is not a welfare program.

What you are stating is in conflict with the VA code.
You felt attacked when I brought up the shredding of applications by multiple locations that forced the va to centralize the processing of apps.
But where is the line?  It's ok to have internal attitudes about gifting that are not reflected in code and thus are arbitrary?  Maybe the people who shredded the apps felt that those vets shouldn't get benefits because they had legally gifted? Is there a culture that has an opinion that is different than the Law?  It was interesting that Chris(another VA processing center employee), ask in a post if "he could mention the $80,000 limit?"
No one is attacking anyone but we are standing up for the law and what is right.

[jpez]

pages 1-I-29 thru 31  from the VA Manual:

M21-1MR, PART V, Subpart iii, Chapter 1, Section 1:

65.  Asset Transfers and Life Estates:  Effect on Net Worth and Income 

Introduction   
This topic contains information on the effect of asset transfers, and the income associated with asset transfers, on Improved Pension.  It includes information on

•   the effect of asset transfers on countable income
•   when a claimant transfers property, but takes income from the property
•   transferring a partial interest in property
•   three examples of transfers of a partial interest in property
•   the definition of the term life estate
•   the impact of a life estate on a claimant’s net worth, and
•   computing property value when a life estate is involved. 

Change Date   February 13, 2007

a.  Effect of Asset Transfers on Countable Income    
A claimant may attempt to reduce net worth or countable income by transferring property to another person without actually giving up all rights in the property.  However, no sale or gift of property to

•   a member of the same household will reduce the claimant’s net worth or IVAP, or
•   a person outside the claimant’s household will reduce net worth or IVAP, unless the claimant can demonstrate that there has been an actual relinquishment of rights to the property and income from the property.

b.  When a Claimant Transfers Property but Takes Income From the Property    
If a transferee takes legal title to the property and receives income from the property, a true transfer is deemed to have occurred.  However, if the transferee turns income from the property back to the claimant, the income is countable under 38 CFR 3.271 as a gift of money.

            Reference:  For more information, see 38 CFR 3.276b. 

c.  Transferring a Partial Interest in Property   
If a claimant transfers a partial interest in property to a person who is outside the claimant’s household, the claimant’s net worth and income are reduced in proportion to the percentage of the asset transferred.

d.  Example 1:  Transferring a Partial Interest in Property to Person Outside Household   
Situation: 
•   A veteran has a $10,000 certificate of deposit (CD). 
•   The veteran adds a nephew who does not live in the veteran’s household as joint owner.

Result:  The legal effect of this transaction is to give each joint owner an undivided one-half interest in the CD.  The value of the CD is reduced to $5,000 for net worth purposes.
this is proof that infact the VA does allow gifts or transfer of assets

e.  Example 2:  Transferring a Partial Interest in Property to Person in Household   
Situation:
•   A veteran has a $10,000 CD. 
•   The veteran adds an adult (non-helpless) child who lives in the same household as joint owner of the CD.

Result:  The legal effect of this transaction is to give each joint owner an undivided one-half interest in the CD.  The value of the CD is still $10,000 for net worth purposes and all of the interest earned by the CD is counted as income in determining the veteran’s IVAP.

Note:  This is the case regardless of who reports the income from the CD for IRS purposes.

 
f.  Example 3:  Partial Interest in Property – No Transfer Involved   
Situation:
A veteran and an adult (non-helpless) child who lives in the same household are joint owners of a $10,000 CD and were joint owners before the date that the veteran became entitled to pension.

Result:  Each owner has an undivided one-half interest in the CD.  The value of the CD is $5,000 for net worth purposes and only one-half of the interest earned is counted as income in determining the veteran’s IVAP.

g.  Definition:  Life Estate    
A life estate is an estate which is limited in duration to the life or lives of a particular individual or individuals, and is non-inheritable.

The life tenant is the owner of the property during his/her life and is entitled to exclusive possession and control of the property.

h.  Life Estate:  Determining a Claimant’s Net Worth   
When a claimant transfers an interest in property to someone other than a relative residing in the claimant’s household, retaining a life estate in the property, 38 CFR 3.276(b) requires that the transfer be disregarded in determining the claimant’s net worth for Improved Pension purposes, unless the right to ownership (control) is relinquished. 

This requirement is due to the fact that the life tenant retains ownership interest in the property during his/her lifetime. 

Note:  If necessary, request a copy of the life estate to determine whether the right to ownership of the property has been relinquished.

Reference:  For more information on the effect of property held as a life estate on pension eligibility, see VAOPGCPREC 15-92.


i.  Computing the Property Value When a Life Estate Is Involved   Calculate the value of the property for Improved Pension purposes based on the market value of the property, less mortgages and encumbrances, without regard to the purported transfer.