FAQ: I have been turned down for Veterans’ Benefits. What now?

by Jerrold Bartholomew

Question: I approached my local Veterans’ Administration office for information about the Aid and Attendance Pension. They told me I had too much money to receive the pension. But I have reoccurring medical expenses of more than $1,000.00 per month. Is there anything I can do?

Answer: This is a delicate situation. On the one hand, some estate planning could allow you to qualify for the Aid and Attendance Pension. On the other, you would be mistaken to think that qualification for the Aid and Attendance Pension alone is sufficient. You need to be planning ahead for Medicaid long-term care at the same time that you are qualifying for veterans’ benefits.

There are several different ways that you could adjust your estate plan in order to qualify for the veterans’ benefits. It is not uncommon to hear of people hoping to convert their assets into income using an annuity in order to qualify for the Aid and Attendance Pension. But this sort of planning could be very short-sighted. If the veteran ever needs Medicaid, the money placed in the annuity will have to go toward payment of the nursing home care. What’s even worse, the state of Michigan will have to be named as a remainder beneficiary. That means that if there is any money left in the annuity at the time of the veterans’ death, it will go to the state of Michigan to repay any Medicaid benefits received. Annuities can have a place in long-term care planning, but they must be used carefully.

It is very often possible to accelerate qualification for veterans’ benefits, but it must be done by an experienced estate planner in order to avoid problems with Medicaid qualification later on.

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