Hooper Law Office,LLC Estate Planning Blog

Monday, January 26, 2015

How is the actual pension amount calculated?

The first step is to calculate your income for VA pension purposes (IVAP).  The IVAP is your gross income minus certain deductions.  Almost all of these deductions are for un-reimbursed medical costs.  This is a long list, but the most important ones are your Medicaid supplement premium, long term care expenses and any deductibles and co-pays you actually aid.  These deductions reduce your gross income to IVAP.  The IVAP is now compared to the maximum pension amount you qualify for.  Thus, if the IVAP is more than the pension you get nothing.  If it is less you get the difference, and if the IVAP is zero or negative you qualify for the  maximum pension.  In most cases you will get little or no pension benefit unless you have high un-reimbursed medical expenses.  However, your pension qualification rating may allow access to other benefits.  If you need home health care, or need to be in an assisted living facility, all of these costs are considered medical expenses.  Therefore, the major impact of a VA pension is that it may allow the veteran or surviving spouse to avoid going into a nursing home (which is the only long term care option paid by Medicaid) by providing extra income for care at home or in assisted living.

Monday, January 19, 2015

What is the amount of the VA pension?

The amount of the pension will adjust for inflation, but at the time of this writing the basic pension for a veteran is about $1,000 per month.  If the veteran is homebound the amount goes up to about $1,200 per month.  Finally, if the veteran qualifies for the Aid and Attendance benefit the pension is over $1,600 per month.  The pension amount for a surviving spouse is approximately two-thirds of the veteran's pension.  If the veteran is married, the pension amount increases by just over $300 per month.  These are maximum amounts, and the actual pension will depend on the level of income.  Regardless of the amount, VA pensions are not taxable.

Monday, January 12, 2015

My ex-spouse was a wartime veteran. Do I qualify as a surviving spouse?

In order to qualify as a surviving spouse you must have been married to the deceased veteran for at least a year and also been married on the date of his or her death.  In other words, if you were divorced you do not qualify.  In addition, if you were married to a wartime veteran at the time of his or her death, but later remarried, you would only be qualified if the new spouse was also a veteran.

Monday, January 5, 2015

Do I need to be disabled to qualify for VA pension benefits?

Yes, you do.  However, for VA benefit purposes anyone over the age of 65 is considered disabled.  Thus, any WWII or Korean era veteran will be considered disabled, and many of the older Vietnam veterans will also qualify.

Monday, December 29, 2014

What if I have too many assets to qualify for a VA pension?

Just as the Medicaid qualification, you will need to divest the excess assets.  The good news is that, unlike Medicaid, the VA does not penalize you for the divestment.  So, instead of waiting up to five years, as with Medicaid qualification, you can be qualified for a VA pension immediately after the divestment.

The other difference from Medicaid is that the VA does not allow you to retain a life estate in any real estate other than your personal residence, and does not allow you to put assets into a trust from which you receive income.  Basically, if you get income from it, the asset counts as being owned by you for the purpose of determining benefit qualification.

Monday, December 22, 2014

What are the asset limits for VA qualification?

Although the VA states an upper limit of $80,000 in assets, in practice the limit usually is lower.  The VA's position is that you should be required to use some of your assets for your care.  Therefore, the amount you can have depends upon your marital status and life expectancy.  A married veteran will normally be allowed to keep more assets than a single veteran, or a surviving spouse.  For a single person the limit appears to be no more than $50,000 in assets.  In addition, a younger veteran with a longer life expectancy is usually allowed a higher level of assets than an older veteran.  The justification is that the older veteran doesn't have as many years left to pay for needed care, and therefore needs fewer assets.

Monday, December 15, 2014

How do I know if I qualify for a VA pension?

In general, the Veterans Administration has done a very poor job of informing veterans about possible pension benefits.  The best plan is to seek the assistance of someone who has been accredited by the VA as a benefits advisor.  There are a few accredited claims agents, but most of the VA accredited advisors are attorneys.  Be careful because not all attorneys who do Medicaid planning are accredited by the VA, and in order to give advice concerning veteran's benefits the VA requires advisors be accredited.

Monday, December 8, 2014

Are the rules for VA pension benefits the same as for Medicaid?

No, they are not.  These are separate programs that have different qualification criteria and different rules concerning asset levels and divestment.  In addition, VA benefits are limited to families of veterans who served during time of war.  The benefits are, in general, either compensation, which is payment for disability tied to military service, or pension payments which are available to veterans, and spouses of deceased veterans, who qualify based upon either low levels of income or high medical expenses.

Monday, December 1, 2014

Do I need help filling out the Medicaid application?

Just as you can do your own income taxes, you can also do your own Medicaid application.  However, when income taxes become complex it is wise to seek professional help.  The Medicaid application is almost always complex.  Experience shows that many people who try to do the qualification process themselves run into difficulty, having problems navigating all of the rules and regulations, and wind up taking longer than necessary to complete the qualification process.  Many wind up seeking professional help to straighten out the mess.  It is usually the case that you will pay more for help after there is a problem than it would cost to have an expert do the job correctly from the beginning.  In addition, for each month the Medicaid qualification is delayed you will pay for a month's nursing home costs.

Monday, November 24, 2014

What options do I have to protect and control my assets?

The words "protect" and "control" used in the context of one's assets are often considered to be mutually exclusive goals; they need not be.  The primary tool used to both protect and control assets is the irrevocable trust.  Many professional advisors that are not comfortable and skilled at drafting complex trusts may tell you, because of more restrictive Medicaid trust rules, that irrevocable trusts are not useful in the Medicaid planning arena.  Nothing could be further from the truth.  Used properly, the irrevocable trust can be one of the most powerful planning tools available.  Working with an attorney who is both intimately familiar  with the Medicaid rules and adept at designing and drafting irrevocable trusts will allow you to utilize these extraordinarily powerful and flexible tools to accomplish your goals.

Monday, November 17, 2014

If I am disabled, can somebody make gifts on my behalf?

This is a very important question.  If you become disabled and have no base level planning in place, it is likely that it will be left to a judge to appoint a guardian to make your decisions for you.  In situations such as this, the court-appointed guardian has little or not ability to plan for your long term care needs if such planning involves a divestment plan.

It is vitally important that you have a comprehensive estate plan in place that will preserve the ability for your chosen helpers to prepare a long term care plan, including a divestment plan, if you become disabled.  Being able to "cross that bridge when you come to it" through comprehensive estate planning ensures that you leave your options open and maintain control of your assets as long as possible.

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