What is the change that the VA is trying to make to VA Pension or Aid & Attendance?
The benefit known as VA Pension, or Aid & Attendance, for a married, war-time veteran, can mean up to $25,000 a year tax free. This money is for long-term care. That can be care at home, in an assisted living facility, or even in a nursing home.
Right now, the VA does not have a “Look-Back Period.” This means if we apply, the VA would look back in time to see if you had given away any assets. However, there currently is no look-back period, but the VA is trying to create one.
Earlier this year, the VA said they would be changing the rules. Whether they can actually do that or not is for another article. They gave an open period until March to comment on this. In our experience, even though it’s now May, we have not seen them apply these new rules. I believe that’s because these rules are so full of problems that I think the VA didn’t clearly think through what they were saying.
Here is an example. The VA says, “If you give anything to a trust, then we’re going to penalize you.” If we apply now, we look back in time three years (this is the number they are proposing). If we gave anything away, they will penalize us or punish us going forward.
Here is a simple example. A married veteran meets the military requirements, the disability requirements, the financial requirements. They have $40,000 in assets plus a house. Two and a half years ago, they set up, for estate planning purposes, a Revocable Living Trust. This trust is like a box that we put the money in. It’s still considered the veteran’s assets for all intents and purposes. A veteran places the money and the house in a trust, they’re in perfect health, and now they’ve had a sudden stroke and they need VA pension. The VA would say, “You gave away assets within the last three years. That’s a problem. We’re going to penalize you.”
Normally, the house wouldn’t count as an asset but since it has been transferred into this Revocable Living Trust, even though it doesn’t’ do anything to affect ownership in a practical way, the VA will penalize you.
This change was not well thought out. That’s not what the VA means to do, but it’s what they wrote.
If you think you might qualify for this benefit, you need to get with a lawyer very soon because you may need to take action before the new Look-Back Period and other changes to the law are applied or, if the new rules are in effect when you need to apply, then you need to make sure you apply the right way.
If we can help you, call us at 205-879-2447 or fill out our contact form and we’ll be happy to help you.