Eligibility for VA Benefits and Trusts
Written by KVanderkooi Fri 07/14/2017
I am writing to address the buzz about the effect of TRUSTS on VA PENSION BENEFITS. Most importantly, nothing substantive has changed. Existence of a trust may or may not cause a potential VA claimant to be ineligible for benefits. It is one of many factors that must be examined when assessing eligibility for VA benefits. This discussion exemplifies the reason(s) to refer potential clients to the Center for Elder Veterans Rights, for a professional legal consultation. Thank you for your referrals!
For those who are interested in the minutia on trusts, continue reading. The VA Office of General Counsel (OGC) has published several formal Opinions concerning what types of trust language causes the trust assets and income to be included in net worth and income calculations for VA Pension benefits. Since 1997, it has been the opinion of the OGC generally that “Special Needs” trusts which allow for trust funds to be paid for the health and maintenance of the Claimant are included in the Claimant’s net worth and income calculations. CFEVR does no financial planning or drafting of trusts. We do however review trusts as part of our pre-filing consultation in order to opine on whether the trust will potentially affect a client’s eligibility for benefits. CFEVR’s experience lies solely in examining these documents.
The issue of the impact of trusts on eligibility for VA Pension Benefits was recently addressed by the Board of Veterans Appeals (BVA) on April 19, 2017 and in the VA’s internal regulation manual on May 15, 2017.
Both of these publications are good news for our industry, by the way of clarity.
The BVA’s Opinion clarified that if there is any method under the language of the trust for the trust funds to be applied to the needs of the claimant, the VA is going to count the assets in the trust toward the net worth calculation. The Opinion reaffirmed the standard set forth previously by the OGC as to “Special Needs” trusts. Interestingly, the BVA looked past
the language of the trust to the testimony of the trustee, obtained during a fiduciary appointment meeting, stating that the trust was established to pay for her parent’s needs. The BVA used the trustee’s/daughter’s unartful statement and the language of the trust document to affirm the VA’s original denial.
The VA updated its manual’s section on assets to address trusts, specifically, for the first time. There is no new law or regulation on trusts implemented, in the new manual entry. The new section in the manual reaffirms the longstanding opinion of the OGC. I believe it will be helpful to VA adjudicators to have the new specific guidelines on when a trust needs to be accounted, as part of a claimant’s net worth and when not.
In summary, there is really not much new
to report. The most important take away is, don’t ever hesitate to send CFEVR a referral where there may be a trust involved. We will provide them with professional, well considered advice. We’ve got this!