On September 18, 2018, the Veterans Administration (VA) published new rules that will go into effect October 18, 2018 that make it more difficult to qualify for important VA benefits. If you are a veteran or surviving spouse that needs assistance from another person, whether that be from a caregiver at home, or due to residing in an Assisted Living Facility or Skilled Nursing Facility, there are benefits available through the VA to help pay for the assistance. However, due to new rules published by the VA, the most favorable planning strategies to protect assets must be implemented prior to October 18 to avoid causing a penalty period.
One of the most notable changes from the VA’s new rules is an implementation of a 36 month look back period. This new look back period will penalize an applicant seeking VA benefits for any gifts/transfers for less than fair market value made in the past 36 months once the new rule is in effect. Trusts and annuities are specifically identified in the new rule as instruments and investments that VA considers transfers for less than fair market value which are currently common strategies used to qualify for benefits. If a transfer is made after the new rule is in effect, the Penalty Period is capped at 5 years
The new rules are over 130 pages long, encompassing a multitude of changes which can impact your eligibility if you wish to pursue VA benefits. The most notable is included herein. A comprehensive summary of the changes will be found HERE.
The good news is, you can still get under the old rules where there is no penalty for making gifts or transferring funds to an irrevocable trust but you have to act quickly before October 18. The new rules go into effect on October 18, 2018, and we must have all planning done and gifts/transfers made prior to that date.
If you would like to pursue a VA application (or at least get a plan in place) before the new, restrictive rules go into effect, please contact our office right away for a complimentary consultation. Thank you to all of our Veterans and Veteran’s families for your sacrifice and service for our country. We are honored for the opportunity to serve you.
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