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VETERANS BENEFITS INCREASE ANNOUNCED

The Department of Veteran Affairs (VA) has announced its 2019 rate increases for certain non-serviced connected disability wartime military veterans, not dishonorably discharged or their surviving spouses to help pay for care costs ranging from being housebound to long-term care costs. However, since these benefits are paid one month in arrears, the first increased payment should not be received until January. The Maximum Resource Allowance (exclusive of the homestead assuming home is not more than two acres although some exceptions apply) is $126,420 since it matches the Maximum Protected Resource amount for long-term care Medicaid.

The new monthly rates range from $1,209 to a widow of a wartime veteran to $2,230 for a wartime veteran who has one dependent. Our website, www.dallaselderlawyer.com has posted the new VA rates in addition to new numbers in connection with Medicaid eligibility (see articles in this newsletter) to help pay for long-term care costs.

Many non-service connected disabled wartime (which means service during a period of war as defined by VA) veterans or their surviving spouse take advantage of these benefits to help subsidize their care costs. For example, if the veteran (or their surviving spouse) is either housebound or he or she is in an assisted living facility, memory care unit or nursing home and the resources of the veteran (and spouse if applicable) or widow of the veteran are less than $126,420, then VA will help pay for such care costs. Since payments are directly received (just like Social Security), it does not matter what facility the claimant is residing (although independent living facilities generally would not qualify). The payments are not subject to income taxation.

Since these benefits are “means-tested”, it is presently common practice to do various planning (i.e., trusts and gift planning subject to the new three year lookback period) to be eligible for these benefits. If the claimant is otherwise eligible for benefits (before any gift or transfer), then a transfer or gift will not result in a transfer penalty. One common problem is that if the veteran’s home is sold after eligibility, then this could result in ineligibility (since they would have cash instead of a home) and VA could demand repayment of benefits received. This situation could be avoided with a properly drafted trust.

If interested in knowing more about “Estate Planning Essentials”; consider registering for our next free workshop on Saturday, December 15, 2018 at 10:00 a.m. or on Thursday, January 10, 2019 at 1:00 p.m.

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