Aid and Attendance= Spouse Died= Can we sell parent's house now?

[vigmar]

Hello,

I used this forum about 3 years ago and received such helpful advice. Our situation has now changed so  I  am seeking new advice. If anyone can help that would be great!

My father, an 86 year old WWII veteran has received an A&A pension for about 3 years now. He is completely incapacitated and resides full time in an Alzheimers facility. I am his adult daughter and hold both POA and VA fuduciary for him. The A&A benefits that he receives do not cover the full cost of his ALF. My mom and my sisters and I all contribute financially to his ALF.

Unfortunately, my dear mom passed away recently. We are working on the seemingly impossible task of trying to settle her affairs.
She continued to live in their primary residence while my dad lived in the ALF. We would now like to sell that home and use the proceeds to cover my Dad's care.
The proceeds from their home will not be much. The house has an outstanding mortgage of $62,000 and would sell for approximately $85,000. The profit from the sale of the home would only be about $15,000. My parents had no other money/property except for a life insurance policy for my dad.

We would like to now cancel my dad's A&A benefits due to the fact that his SS payments and his small work pension will now just about cover the cost of the ALF since my mom will no longer need any of his money. The small profit from the sale of the house would be used to cover the remaining cost of the ALF that is not covered by his monthly income.
 Another option that  we are considering would be to  continue the A&A benefits until we sell his home as we need to make the monthy mortgage/tax payments on the vacant home. My sisters and I can not afford to do that. In this real estate market in Calif we are not sure how long that would take but would definitely discontinue the benefits as soon as the house sold.

What do we need to report to the VA right now? Can they put a claim on the $15,00 for any previous benefits? If we cancel his A&A immediately do we need to report anything else to them? Should we wait until we sell the house and then discontinue the A&A?

Thank you so much in advance for any answers/advice anyone can provide.

[Fit2009]

Don't cancel the award, if medical expenses have decreased, inform the VA of the decrease - in fact, since your mother has passed away, Send them a letter with new monthly income and monthly medical expenses, what her funeral costs were and what the remaining (non-house or personal property) assets are. Do not mention the house.
When the house sells, within 30 days, write a letter to the VA stating the house has sold and what the new assets are.  The Va will then let you know if they are going to suspend the award.  If they do, send them a letter with new asset figure everytime his assets drop by $5K and they will reinstate when he no longer has excessive assets.  Don't be surprised if he is able to keep the benefit the entire time as $15K is not very much.
With Sympathy on the passing of your Mother

[vigmar]

Thank you Fit2009 for your response! I really appreciate it!

I think we will keep the A&A for now as you suggested.

What should I report to the VA at this time? Do I need to let them know that my Mom died now, or do I report that on the yearly form that I fill out?
 
Also, we are thinking of renting out my parent's house for the time being until we decide what we are going to do with the house. The rental income would only cover the cost of house mortgage payment and the homeowner's insurance. There would be no additional income received if we rented out the house. Does this need to be reported to the VA?

Thanks again for all the great advice I have received on this site!

[pologal1979]

tell them ASAP that mom died.  call VA if you need to and have dad there to provide his permission to use the info you provide.  otherwise, send a letter.  provide a death certificate. go on the va website and find and complete 21-8049.  on the back, write in all of the last expenses dad paid.  on the front report monthly expenses. 

[Fit2009]

When the house is rented, the house becomes a countatble asset to the VA - you have to report rental income (net of all expenses - just like on your tax return) and the net realizable valuae of the house.