If you are a Veteran or spouse of a Veteran you may want to act before the October 17, 2018 deadline to protect your assets.
By:: Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal
On September 18, 2018, the Veterans Administration published new changes to their benefits program for Veterans over age 65 and their spouses, commonly referred to as Aid & Attendance (A&A). If you or your parent is a war-time veteran, married to a war-time veteran or a widow(er) of a war-time veteran, you have until October 17, 2018 to take action under the more liberal old rules to potentially preserve some of your family’s hard-earned assets.
Many of these seniors require help with activities of daily living, such as getting out of a chair, bathing and dressing. This government program is available to help pay for care in the home or a facility up to approximately $2200 per month.
After October 18, the rules change and will penalize families who have made a gift to their children or transferred assets into an irrevocable asset protection trust. After that date, the program will impose a “look back” period of 36 months prior to an application being made, and the penalty for making such a uncompensated transfer (gift) can be as much as 5 years before you can apply for the A&A benefits.
The old rules, that expire on October 17, are more liberal in allowing families to protect their assets that they spent a lifetime saving.
As with everything, there are eligibility rules and limitations for A&A.
FIRST, the veteran, (spouse of a veteran or widow[er] of a veteran) must be older than 65 and actually be in need of help [A&A] from another person.
SECOND, the veteran must have been discharged from the military other than dishonorably and served at least 90 days of active duty, with at least one of those days being during wartime. The official wartime dates are: World War II [December 7, 1941 to December 31, 1946], Korean War [June 27, 1950 to January 31, 1955] and the Vietnam War [February 28, 1961 through May 7, 1975 inclusive for Veterans who served in Vietnam during that period and August 5, 1964 through May 7, 1975, inclusive for all others]. There is no requirement that the veteran had to be on the front lines; mopping floors in Washington, D.C. would be sufficient.
THIRD, there is an income limitation. When a veteran truly needs A&A, the cost of the caregiver usually exceeds the veteran’s income. If this is so, the applicant may qualify for the cash benefit.
FOURTH, there is an asset limit. Under the old rules that expire on October 17,, the veteran (and spouse) is allowed no more than $80,000, and a house, household furnishings and few other items. Under the new rules, the veteran (and spouse) is allowed to have $123,600 of countable assets plus annual income in excess of unreimbursed medical expenses (if any). Not all assets are “countable” towards this limit. A residence plus up to two acres of land around the residence, household furniture and a vehicle are not counted.
WHAT SHOULD YOU DO?
If you or your parent is a war-time vet or widow, it would be to your advantage to act quickly.
If you already are in need of A&A but have not submitted an application yet, the VA will utilize the old rules (no look-back period for uncompensated transfers) if you submit your application before Oct. 18.
If you are not ready to submit an application but wish to preserve assets for your family in the event that you require A&A in the near future, you might consider transferring the farm or other asset into a trust before Oct. 18.
The clock is ticking, and attorneys who help vets might get very busy over the next month, so if you or your parent is a war-time vet or widow, it would be to your advantage to act quickly.
We help our clients create estate plans to protect their independence, assets and families. How much do you think it is costing you and your family by not acting before the October 17 deadline? Call Senior Edge Legal, 208-344-0375 if you may need our help.
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