Trusts, Annuities, and Outside Assistance

[Jim7]

My mother is a vet (1951-1953).  She just moved to assisted living.  She has assets (minus house and car) of about $180K (plus social security and a small pension).  The assisted living facility advised that she is eligible to receive VA benefits to cover ALV expenses.  They recommended a financial advisor who specializes in filing for this assistance.  He recommends that my mother place her assets (two annuities and some other small investments) in a trust with a family member as trustee (lawyer fee to set up the trust is $1200).  This means cashing out the annuities and investments that we have with another financial advisor and moving the funds to this guy.  He is certified and no issues with the BBB.  His compensation is that he would collect commission on investment of the trust money.  Does this sound legitimate?  I would appreciate any insights or considerations that anyone has on this topic.

Thanks,
Jim

[vetadmin]

Jim,

This is an area where you really need advice that is beyond the scope of this forum as this is a legal question.  I'm surprised that the ALF suggested she would qualify given her income and also suggested someone for you to contact who wants $1200 and to make commission off the annuities.  You might want to contact an Elder Law Attorney and investigate a little further before signing up for these services.

[Tabby]

My situation is a bit different, but similar.  An elder law attorney suggested we reduce Mom's assets the same way (surviving spouse benefit, my father died Sept 2009) to apply.  The tax and penalty consequences would be substantial to her. 

She is just move to ALF in January, is there a time limit after moving to ALF that she must file, or is it possible for her to live on what she has financially and perhaps file and request the A&A in a couple years when she could really use the aid?

[vetadmin]

There is not a time limit to file, and you would be wise to wait until the funds go down and make the applicaiton then so she would meet the financial eligibility.  It would be foolish to to take the penalty and that could ultimatley cost you more.

[Tabby]

Thank you for the time to reply.  This is what we were thinking after learning about the amount of $$ consequences for cashing in.  As long as this benefit is not a temporary benefit, it would be prudent to wait.