One of the benefits of serving in the military is the potential ability to collect retirement benefits from the Veterans Administration (VA). These types of veterans benefits could help many Californians. Though not available to all veterans, according to the VA, there are 1,053,964 veterans older than 60 living in California.
A VA pension, known as non-service connect pension, is paid to wartime veterans and certain dependents. This is a means-based benefit with the following requirements:
• The veteran must be 65 or older or permanently and totally disabled (not due to his or her own willful misconduct). There is no age requirement for a surviving spouse to qualify for widow’s pension.
• The veteran’s discharge must be other than dishonorable.
• For those who entered active duty before September 7, 1980, the veteran must have served at least 90 days of active military service. One of those days must have been during wartime.
• The veteran’s net worth cannot be “excessive.”
• The countable family income must be below a yearly limit.
The last two present opportunities for us to help veterans and/or their spouses. Normally irrevocable trusts can be used to reduce a veteran’s net worth to qualify for pension benefits. Unlike Medicaid, which has a five year “look back” period when considering the assets of a person applying for benefits, the VA currently does not impose a penalty for the transfer of assets if it was done prior to the filing of a formal claim, or notifying the VA of the intent to file a claim.
Many veterans have irrevocable trusts created to hold assets gifted by a veteran claimant or surviving spouse to reduce their net worth to qualify for benefits. To satisfy the VA, these trusts must meet certain limitations and requirements. This is a highly technical area that is subject to change, so if you are interested in obtaining these benefits, you need the services of an attorney experienced in creating planning documents that comply with the applicable laws, regulations and VA rules.
Brian Chew, Esq.
OC Wills & Trust Attorneys