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Improved Wartime Pension
By Michael D. Fowler, J.D., LL.M.
 

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.

If a married veteran already has an income of $2,020 per month or more, the initial VA reaction will be that the veteran cannot get the pension—his income already exceeds the maximum pension rate. The key here is to determine “income for VA purposes,” which is gross income less unreimbursed medical expenses. The cost of care in an assisted living facility, for example, can be treated in its entirety as unreimbursed medical expenses, therefore typically qualifying eligible veterans for the maximum pension rate.
 
Sometimes, the veteran needs assistance from a child or other relative who does not live in the same household. In that situation, we can help the veteran and the care provider enter into a written personal care agreement and the payments, under a properly drafted agreement, will also qualify as unreimbursed medical expenses to enable the veteran to receive the pension check.
 
Mr. Fowler has practiced in the Treasure Coast area since 1980, with an emphasis on Wills, Trusts and Estates since that time and has been a Florida Bar Board Certified Wills, Trusts and Estates Lawyer since 1992. He has also obtained Florida Bar Board certification in Elder Law, and is one of only 3 attorneys on the Treasure Coast to have such a distinction. Mr. Fowler is a member of the Real Property, Probate and Trust Law section and the Elder Law section of the Florida Bar and a member of the Academy of Florida Elder Law attorneys, the National Association of Elder Law Attorneys, and ElderCounsel, a membership organization of attorneys devoted to excellence in elder law services.


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