NEW RULES EFFECTIVE 10/18/2018
These new rules (find them here) apply to VA pensions and VA needs-based benefit programs. We're still reading through the new rules and commentaries, but here are a few highlights so far:
Asset Limits:
Prior to the rules becoming effective on October 18, 2018, assets limits (for the next month, are) were not "hard" or absolute rules. Typically, an unmarried Veteran who met war-time and medical standards could qualify for pension and needs-based benefits if they had fewer than $50,000, and a married Veteran who met war-time and medical standards could qualify if they had fewer than $80,000. But these amounts didn't represent a guarantee of meeting asset qualifications.
The rule change reflects a more generous and absolute rule. After October 18, a Veteran who otherwise meets war-time and medical standards can qualify for pension and needs-based benefits if they have fewer than $123,600 in assets, whether or not they are married. This new number is based on the upper limit of the Community Spouse Resource Allowance (CSRA) under Medicaid. The new VA rules seems to indicate that the VA asset limit will track with the CSRA annually.
Look-Back Provisions:
If you're looking at the new, more generous bright-line limit and scratching your head about the need for this red alert, here's why - in the past, Veterans could transfer assets out of their estates - such as to a Veterans' Asset Protection Trust or into an annuity - and qualify for pension or needs-based benefits immediately, without any "look back" penalty.
The October 18th rule changes that and imposes a 36-month look-back period.
Meaning, starting October 18th, Veterans will have to plan three years in advance, or face self-paying through a penalty period. This will function more like the 60-month (five year) look-back period for Medicaid eligibility.
Other Key Provisions:
Adult children: If a Veteran lives with an adult child, the adult child's assets are countable against the Veteran and can prevent them from qualifying for benefits.
Real Estate: Provisions intended to protect the Veteran's residence only apply to 2 acres. With some fuzzy exceptions, real estate over 2 acres, even if it is part of the primary residence, is countable against the Veteran and can prevent them from qualifying for benefits.
WHAT YOU NEED TO DO BEFORE OCTOBER 18:
1) If you are a disabled war-time Veteran or your spouse was a war-time Veteran, you need to start planning for pension and needs-based benefits now, BEFORE OCTOBER 18th.
2) You need to transfer all available assets over $50,000 (if you are unmarred) or $80,000 (if you are married) to a Veterans' Asset Protection Trust so that you can avoid being penalized in a look-back period.
3) If you are a war-time Veteran or your spouse was a war-time Veteran but you are NOT currently disabled, you need to transfer all assets over $123,600 to a Veterans' Asset Protection Trust to get out in front of the new 36-month look back period, SO THAT you can meet the asset requirements in the future if and when you become disabled.
We know navigating these types of programs can be complicated. If you are concerned about your eligibility, we need to schedule a consultation ASAP.
If you want to know more, we would love to talk with you about it. Best part, the conversation about how it could benefit you doesn't cost anything. Contact us at (918) 770-8940 or firm@tallgrassestateplanning.com to set up a free consultation, either in person, video chat, or phone call.
Disclaimer: Reading this blog post does not create an attorney-client relationship, and it is not formal legal advice. This is for information purposes only. Your best bet, always, is to speak with an attorney about your questions, assets, concerns, and needs.
