URGENT Legal Announcement – The VA Imposes 3-Year Look Back for Transfers affecting Wartime Veterans
Since January 2015 when the VA proposed amendments to its regulations concerning the requirements to qualify for the Improved Pension (commonly referred to as Aid & Attendance) we have been waiting for the shoe to drop. September 18, 2018, the shoe finally dropped. The new rules will go into effect OCTOBER 18th.
What Are The New Rules?
Three-Year Look-Back For Asset Transfers:
Beginning October 18, 2018, the VA has announced there will be a 3-year look back on asset transfers for less than fair market value. Previously you could transfer assets in one month, and apply for benefits the next month with no look back at all. The 3-year look back has eliminated the option of last-minute planning with immediate benefits.
***Any transfer prior to October 18, 2018 will be protected and not subject to the new laws; however, the transfers need to be made strategically in the right way.
Penalty for Asset Transfers:
Transfers made during the look-back period will be subject to a penalty period (a period of ineligibility) that can last up to 5 years. The penalty is calculated by using a set amount as a divisor (the monthly MAPR for a veteran with one dependent, which is currently $2,169.00 per month for Improved Pension with Aid & Attendance), regardless of whether the application is for a surviving spouse or a qualifying veteran. Once determined, the penalty period begins on the first day of the month that follows the last asset transferred.
Net Worth Test:
The prior “asset test” was “sufficient means” which was generally around the $80,000 mark. Under the new regulations, the asset limit is now set at $123,600 for 2018 and increased each year with inflation. The asset test takes into account all assets (minus the primary residence and personal belongings like cars) plus annual gross income, minus permissible medical expenses. Be sure to check with an experienced attorney who is also accredited agent by the VA to determine whether your assets are countable or exempt under the new laws.
Allowable Medical Expenses:
The changes now allow qualified veterans and widows to deduct Independent Living Facilities expenses as a deductible medical expense as long as a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist says that the person EITHER needs assistance with 2 ADLs (Activities of Daily Living) OR supervision due to cognitive or physical limitations. Previously only home care, assisted living and nursing home care costs were allowed as deductions.
Act Now!!
If you are a Veteran or Widow(er) of a Veteran and Want Help Paying Long Term Care Costs, you should:
- Contact The Estate & Asset Protection Law Firm at 404-370-0696 as soon as possible so we can help you determine if you would benefit from VA Benefits Planning.
- Complete ALL Asset Protection Planning before the October 18th Deadline. All transfers that occur prior to October 18th will not be penalized under the new rules, even if an application for benefits is filed after that date. To be protected from the impact of the new rules, all planning should be completed by October 18th
If You Provide Services for Veterans, you and your team need to know about these new rules.
Contact our office at 404-370-0696 or info@elderlawgeoriga.com to find out about upcoming educational workshops and training opportunities on the VA’s updated rules and to refer your clients directly to us as time is of the essence.
Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!
