net worth

Discussion in 'General Discussion' started by rrinebol, Mar 20, 2009.

  1. vetadmin

    vetadmin Administrator Staff Member

    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.
  2. vbcoder

    vbcoder Jr. Member


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

    jpez Full Member

  4. vetadmin

    vetadmin Administrator Staff Member

    Thank you.
  5. Max

    Max Hero Member

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

    jpez Full Member

    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.
  7. Drew43920

    Drew43920 Newbie

    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 ????
  8. Max

    Max Hero Member

    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.
  9. jpez

    jpez Full Member

    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.
  10. jpez

    jpez Full Member

    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

    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
    • 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
    • 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
    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.
  11. Max

    Max Hero Member

    I know that jpez is no longer posting here, but I think it is an important note to make that VA's general counsel opinion has defined household to include close family members including children and siblings, even if they do not live with the veteran. I cannot stress it enough how much easier it is to report the net worth up front honestly. The 80k number is not set in stone. VA can pencil in anyone so long as there is a good financial reason to do so (i.e. will their net worth last for the rest of their lives? if no, even if it is really really really close, VA ALWAYS grants).

  12. blinky

    blinky Newbie


    With all due respect...

    Please cite the relevent OGC opinion to back up your statement.

  13. Max

    Max Hero Member

    From what I understand, PREC 33-97. 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.
  14. Dex

    Dex Newbie

    Just stumbled across this site while researching eligibility for the VA Aid & Attendance. I heard a presentation at an assisted living community a couple of weeks ago about the tax free monthly income available to veterans. The presenter went through the eligibility requirements and said not to worry about the net worth requirement. He said with proper estate planning involving a process called stacked gifting the net worth requirement would not be a problem for either the VA Aid & Attendance or Medicaid. At a subsequent meeting in his office he revealed his charges for the service - $30,000 plus he wanted 3% per year for managing the assets. This guy must have had Bernie Madoff as a mentor. Why isn't there protection for seniors from such a blatant scam?

    I followed a link I found on this website to an attorney in my area that specializes in Veterans Benefits. I spoke to the attorney this afternoon about the A&A benefit and the legality of transferring assets to qualify. Not only did she say the strategies utilizing irrevocable trusts were legal for A&A but also for Medicaid. She equated the strategies to the strategies used by people who set up trusts to avoid estate and probate fees or by people who utilize strategies to reduce their income tax. Her fee - $4000.

    After reading the discussion here it appears most believe the strategies used to reduce net worth may not be illegal. Many that appear against any strategies are influenced by moral issues.

    Does anyone here know anyone or heard of anyone actually being denied benefits because they used strategies to reduce net worth?
  15. Fit2009

    Fit2009 Sr. Member

    I have not. I know of someone who was qualified last week who originally submitted with $183,000 in assets and was approved as of the orginal filing date. I also know that in June the instructions for the 21-526 were changed to require the veteran to disclose any gifting or transfers that have been done...the fall out from that, if any remains to be seen
  16. VetAdmin, I am here because I am in the same circumstance as many deciding what to do. I went to an ALF and they also said not to worry, that creating a trust was simple and legit. VETAM, do not shut the thread off, this is not to be discussed in a Private way. I want to hear both sides of the story. The rules do change and it seems the VA is getting more funds to help the vets. I do want to hers your POV, So as an Veteran Admin, what is your point of view on transferring assets to qualify?
  17. Fit2009

    Fit2009 Sr. Member

    IMO - not that I am VETADMIN, the VA does allow transfers of assets, along as the vet has given control and their is no supplemental needs language or life estate. In June 2010 the VA added instructions to the 21-526 to require disclosure of all gifts and transfers no matter when in the life of the veteran they occurred. To date it does not appear to be accompanied by a change inthe underlying regulations.

    I think the issue is, some people believe that you should not move assets to get onto a government needs based program, which this is.

    Well, if there is a government program I can fit into, I am going to.

    People feel adamently both ways, the fact is the VA has not implemented a look back period but most restructuring either does not work for both Medicaid and the VA or leaves the senior at risk of not being able to access the funds should his care costs increase - this is the issue people have when all their funds are placed in an annuity.
  18. vetadmin

    vetadmin Administrator Staff Member

    I don't believe that I would take the word of the ALF as their agenda is to get the resident, and they do not have the appropriate background in filing or qualifying for this pension. You need to speak with an Elder Law Attorney who can best advise you the proper course for your circumstances.

    You may also want to contact to explore some other options that may be available.

    I am not a an attorney nor am I a financial planner, so I will refrain from my point of view on the topic, but Fit makes the point well as to why there are strong arguments to both sides of this topic.
  19. Fit2009 and VetAdmin, Thank you for your replies.

    I know in time I will need assistance, and I do not know what my future needs will be. So until then, I will use what I have to provide for myself. It is a nice comfort to know that you (VA) will be there when and "IF" my needs arise. Thank you.

    Being alone and then then visiting some ALF, these I could not ever afford on my own, it seems that being in company of other Vets and with VA assistance, my quality of life, whatever is left would be better.

    Good Forum.
  20. vetadmin

    vetadmin Administrator Staff Member

    Thank you and we wish you the best.

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