The Elrod Firm


How Can I Plan Ahead for VA Benefits?

Justin, I read your comment that planning ahead for VA benefits is more crucial now than ever. Can you clarify why you say that and explain how I can plan ahead? – Stan

Stan, Thanks for the follow up questions. Under the old rules for the VA Aid and Attendance benefit, there was no lookback period or transfer penalty. That meant that someone seeking VA benefits could make last minute changes to their real estate and financial accounts if they didn’t already meet the VA asset test. Without any sort of waiting period, they could file for benefits almost immediately after making those changes.

Under the new rules, the VA is imposing a three year lookback period. That means when a person files for benefits, they’ll have to disclose all asset changes that occurred in the three years immediately leading up to the date the application is filed. If assets were transferred in that period that helped the person qualify under the asset test, the VA will then impose a penalty period during which no benefits will be paid. The more assets the claimant transfers, the longer the penalty.

Under the new rules, you must plan ahead if you hope to qualify for VA in the future but currently have countable assets in excess of the current limit—$123,600. Most of our clients are interested in using an asset protection trust to shelter assets from consideration by the VA (and other governmental agencies for that matter) without the risk and tax disadvantages that comes with putting assets in the names of their children.

The use of that type of trust has always been a top planning option when it comes to VA benefits, but now you must set it up three years before you apply for the benefit instead of waiting until the last minute. That is why I consider planning ahead more crucial under the new rules. To explore all the options available to you, call today for a free strategy session.

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