Assets counted for A & A

Discussion in 'General Discussion' started by Beth, Jun 13, 2010.

  1. Beth

    Beth Newbie

    I was told by someone who helps those of us in need of help in applying for A & A for our parents that 2 or 3 months ago there was a change in the rules and the VA now includes the veterans home as a countable asset. Is this true? Thanks for your help!
     
  2. vetadmin

    vetadmin Administrator Staff Member

    No it is not true.
     
  3. jpez

    jpez Full Member

    The home would become a countable asset when the person moves out and to another place to live (independent or assisted etc).
     
  4. vetadmin

    vetadmin Administrator Staff Member

    This would be based on the "assumption" that the person would not be hoping to be able to return home again. Iif there is "hope" they would be able to return to their home, then NO. If no hope of "ever" being able to return home, then yes.
     
  5. Beth

    Beth Newbie

    Thank you for the clarification. I appreciate your help.
     
  6. The recently revised 21-526 is now asking about any "asset transfers", instructions (pg 5) Sec. IV Net Worth. What does this mean to those who have transferred significant assets to a trust or gifted children?
     
  7. vetadmin

    vetadmin Administrator Staff Member

    It means that due to all the financial groups out there who saw this pension as a way to make a fast buck and moved things around so that folks who would not have been eligible without doing so to qualify, has come to the attention of the VA, and this is their way of coming as close as they can to doing a "look back" period the way Medicaid has.

    The VA makes no bones about not being in the business of protecting assests for distribution to heirs.

    The recommendation would be to speak with the attorney who set up the trust or made the gifting suggestion.
     
  8. Max

    Max Hero Member

    The provision described above regarding gifting assets to family members to qualify for the program is actually quite incorrect. 38 CFR 3.276 states that assets gifted to family members of the same household are still considered assets for VA purposes. Household for VA purposes as far as assets transfers has been defined to include children and spouses of the veteran and/or widow, even if they do not necessarily live with the veteran/widow.

    The obvious side note here is that it is very hard for VA to track and/or prove transfers of assets. However if VA does find out later, this will lead to VA recouping the entire amount of benefits paid out from the original start of the award. As rare as this is, nobody wants to end up with a $100,000 debt. Furthermore, if the son, daughter, or spouse of the beneficiary is the payee/fiduciary for the beneficiary, the debt will be issued in their name.

    I have seen this happen to people and it is not pretty.

    Other options for decreasing net worth is to prepay for funeral/plot/burial expenses. Also, net worth is not as clear cut as it seems as far as the requirement goes. Many people are approved with net worth over the $80k mark so many are quick to cite. The reason that every net worth determination requires an administrative decision is because the adjudicator must be convinced by the evidence that granting the award would cause unjust enrichment at government expense. If the veteran has $250,000 in the bank, but his nursing home costs $7,500 per month and he is only 80 years old, then his net worth isn't even going to last him 4 years (assuming SSA of $1,000/month). We would almost certainly grant this award. Obviously most nursing homes are not $7500, but it does show that it isn't as scary and concrete as it may seem.

    The best thing to do is report the net worth honestly the first time around because of two factors:

    1. VA employees are directed to grant if you can, deny if you must - if you get denied the first time, and there is the possibility of granting, then it just means that when you reapply in 6 months, the adjudicator would have to do all of the same work all over again to grant. This doubles VA's workload and slows down other veterans' claims.
    2. On the off chance they VA finds out later about the transfer, it causes major problems and debts that nobody wants to deal with. It is harder to get a waiver of the debt if you are the son/daughter of the beneficiary because DMC will likely find you at fault for the creation of the debt and will determine that based on your income, you would likely be able to repay the debt over time.

    I've said my piece! Questions? PM me or respond
     
  9. atiner

    atiner Newbie

    I appreciate the post on 38 CFR. Where in 38CFR is household defined as children even if they are not dependent children? Is there some precedent or BVA or US Court of Appeals for Veterans case you could cite? Thanks that would be helpful as we consider LTC needs.
     
  10. Max

    Max Hero Member

    From what I understand, PREC 33-97 (this is a general counsel opinion). If funds are held for the veteran's benefit, even if he has no technical, legal access to said funds, they are still countable net worth for VA purposes. In fact, this citation specifically discusses how many people are using public programs like VA pension and Medicaid to protect assets for an inheritance, even though it constituted unjust enrichment at taxpayer expense.

    I'm not a lawyer or anything like that, I just know that these two references are what are used at VA to make appropriate denials when net worth is an issue. As I hope we all know, this benefit is for people who really need the funds to live out their golden years with a degree of dignity or to stay off the street. It is not meant to protect assets so that their heirs can receive a larger inheritance.

    If there is any indication that a claimant's net worth will not last for the rest of their lives, VA always grants. Please be honest and protect the dignity and integrity of the programs that were created to protect our country's most vulnerable heroes.
     
  11. vbcoder

    vbcoder Jr. Member

    Very well stated Max!
     

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