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A Better Partnership


Jun 2012
June 01, 2012

Estate Planning Tip: 2012 Veteran’s Benefits

Senator Ron Wyden of Oregon has introduced a bill that will restrict eligibility for veteran’s benefits used to help pay for home health care, assisted living and nursing home expenses. The bill would impose a 36-month look-back period for transfers made by a veteran or veteran’s spouse to qualify for the Aid and Attendance benefit.

Currently, there is no look-back period and a wartime veteran or surviving spouse of a wartime veteran with excess assets can qualify for the Aid and Attendance Benefit by making transfers to a properly drafted irrevocable gift trust or, in some circumstances, by the purchase of an immediate annuity. The bill, if passed, will disqualify a veteran who has made transfers within the 36-month look-back period from receiving benefits for a period of time that depends on the amount that was transferred.

Even without a look-back period, transferring assets to qualify for veteran’s benefits requires careful planning because of the possibility that the veteran will need Medicaid within 5 years of the transfer. (Medicaid currently has a 5-year look-back period.) If the veteran’s care needs increase, it is often necessary for the veteran to qualify for Medicaid because veteran’s benefits typically are not enough to cover the full cost of nursing home care. Therefore, planning for veteran’s benefits must be dovetailed with Medicaid planning by providing for transfers that will not disqualify a veteran for Medicaid or by ensuring that transfers can be reversed, if necessary, to cancel Medicaid penalties.

A look-back period for veteran’s benefits will further complicate the planning necessary to qualify for long-term-care benefits. It will also heighten the importance of getting started early with estate and long-term-care planning.


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