New Rules Drastically Change Planning for Senior Veterans & their Spouses
A look-back period & set asset limit will take effect on the 18th
By: Sivia Law
"Many veterans are completely unaware that if they are 65 or older and on a limited income they may qualify for a VA Pension without being disabled." Said attorney Todd Sivia. "If you use the right strategy, the majority are eligible for benefits."
A VA pension can provide some level of income security for wartime Veterans and their survivors. You receive monthly cash benefits meant to help with care costs. A veteran and their spouse can receive up to $2170 per month to pay for long term care needs either for at home or nursing home care.
With the new rules, there will now be a look-back period of 36 months when applying for needs-based pension benefits for wartime Veterans or for the surviving spouses and dependent children of wartime Veterans. Any asset that was transferred for less than fair market value during the 36-month period immediately preceding the pension application will result in a penalty period, not to exceed five years. It is crucial to seek advice before making any transfers so you are not penalized.
Another change is there's now a bright-line rule regarding the net worth of a Veteran. This amount is currently set at $123,600.00, which is also the maximum Community Spouse Resource Allowance amount allowed by Medicaid. This number will increase annually with the increase in Social Security benefits. If the Veteran or other claimant has a net worth over the threshold and thus does not qualify for benefits, he or she can spend-down assets by purchasing goods or services for fair market value.
Sivia says, "The asset limit does not apply to those seeking benefits today. There are strategies that are available that can qualify an individual for these needed benefits."
To qualify for these VA benefits, you must require the aid of another person in order to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting yourself from the hazards of your daily environment. If you need assistance with two of the above, you qualify for benefits.
Under current law, VA recognizes the following wartime periods to determine eligibility for VA Pension benefits: Mexican Border Period (May 9, 1916 – April 5, 1917 for Veterans who served in Mexico, on its borders, or adjacent waters), World War I (April 6, 1917 – November 11, 1918), World War II (December 7, 1941 – December 31, 1946), Korean conflict (June 27, 1950 – January 31, 1955), Vietnam era (February 28, 1961 – May 7, 1975 for Veterans who served in the Republic of Vietnam during that period; otherwise August 5, 1964 – May 7, 1975) and Gulf War (August 2, 1990 – through a future date to be set by law or Presidential Proclamation)
"My staff is working overtime to meet with clients and get them their benefits before things go into effect on the 18th." Continued Sivia. "If you think you may be eligible, please don't hesitate. The process is complicated and we want to help."
These two major changes have broken from the historical rules of no look-back period and no set asset limit. The complete set of new rules, including the above, will go into effect on October 18, 2018. So, any assets transferred before this date will not be subject to the 36 month look-back period. Nor will the asset limit be applicable. Because of this, it is extremely important to pursue VA pension planning before October 18, 2018.
If you have questions about VA pension planning or would like to start the process before the rules change, please contact Sivia Law at 618.659.4499 (Illinois),314.361.3028 (St. Louis) or http://www.sivialaw.com.
Sivia Law is an asset protection law firm. The legal practice focuses on business law, real estate, estate planning, probate, special needs planning and elder law. Sivia Law is committed to quality legal representation at affordable prices. The law firm is located at 217 South Main St., Edwardsville, IL 62025. Also, view the website at www.sivialaw.com.