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Improved Wartime Pension

The availability of assistance to veterans with unreimbursed medical expenses is a little-known and often misunderstood benefit, which can provide payments of up to $2,020 per month to a married veteran and $1,094 per month to the surviving spouse of a veteran.
 
In order to be eligible, the veteran must have served at least 90 days of active duty, at least one day of which was during a declared wartime period. The veteran must also have received other than a dishonorable discharge.
 
Once we have ascertained that the veteran needs “Aid and Attendance,” we then look to the asset and income limitations. With respect to assets, the residence and certain other items are exempt; and in practice, the older the veteran, the less net worth the VA will allow to be retained to sustain the veteran for the rest of his life. Generally, for planning purposes, we try to reduce the veteran’ s net worth to as low a number as the veteran can be comfortable with so as to maximize the probability of approval of the application.
 
Unlike the Medicaid qualification criteria, there is currently no look back period with respect to asset transfers. We oftentimes, therefore, use irrevocable trusts to which excess assets are transferred so as to qualify the veteran for pension.  A trust is not absolutely necessary—the excess assets can be transferred to children or other loved ones, but this is generally not recommended because the assets are not as well protected. For example, what happens if the child dies, gets divorced, is sued, develops a substance abuse problem, or loses their job?
The other advantage of this type of planning is that the irrevocable trust can be structured in such a way that the assets are not available resources for Medicaid purposes after the expiration of five years.