In 2014, Congress proposed a law that would penalize veterans and surviving spouses of veterans who were looking to apply for the VA Benefit if they transferred assets within the three year period from when they applied for benefits. If the veteran or surviving spouse did transfer assets, there would be a penalty imposed on the veteran or surviving spouse.
However, that bill failed and never saw the light of day.
VA Benefits Proposed Rule Change in 2015
In early 2015, the VA took another route to get the “3 Year Look-back” rule implemented. Instead of a change in law through Congress, they looked to change the administrative rules.
With that goal in mind in early 2015 they made a proposed rule change that would implement a 3 year look-back. There was a comment period that closed March 24th. There were over 900 people who made comment, including many elder law lawyers.
There were credible rumors in the elder law attorney community that the proposed rule change would go into effect in the spring of 2016.
Another Attempt for Congress to Pass VA Rule Change
The Elder Care Firm’s VA Accredited Attorneys have consistently advocated for veterans, and argued the VA did not have independent authority to make such changes and needed Congressional approval. Apparently the VA agrees, so it secured the support of a few senators to craft a bare-bones House Resolution called the “Veterans Care Financial Protection Act of 2016.” Essentially, this Act would approve any “standards” developed and implemented by the VA “that protect individuals from dishonest, predatory, or otherwise unlawful practices relating to increased pension available … on the basis of need for regular aid and attendance.”
If this Resolution passes, all of the proposed changes to Title 38 of the Code of Federal Register, as drafted by the Veterans Administration, affecting veterans, imposing transfer penalties of up to 10 years, would become law.
However, according to VA law expert Victoria Collier, there is one glaring problem, “neither the bill nor the proposed changes in Title 38 define “dishonest, predatory, or otherwise unlawful practices.”” For example, lawyers who draft estate planning documents, licensed to do so in the state where the client resides, are acting lawfully. Certainly, misrepresentation that a trust or an annuity is required in order to get VA benefits is dishonest. But making transfers of assets to trusts and the purchase of an annuity itself are not unlawful. Holding educational seminars is not predatory.
Collier goes on to comment, “This is yet another example of a poorly drafted piece of legislation designed to appeal to the emotions of the ignorant, and it purposely does not adequately explain the consequences for or against the cause.”
Veterans will be harmed by the changes in the laws, not protected. The VA could punish the group of professionals using unethical practices or committing illegal acts.
Let your representatives know the real issues behind the reason for this new resolution. Urge them not to pass this blindly – know what the proposed rules are that affect pension benefits and veterans.
Planning ahead for VA Benefits and Medicaid
The earlier a family starts planning for a Veteran or surviving spouse of a veteran, the more options are on the table as the loved one navigates the long-term care journey. Often, as VA Accredited Elder Law Attorneys, we utilize special asset protection trusts to help qualify for the VA Benefit or Medicaid.
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