- Family Law
In the past, an applicant for Veterans Administration (VA) Aid and Attendance benefits could make gifts of assets in order to become financially eligible. The VA did not penalize such gifting. However, the rules never actually stated what an applicant’s net worth needed to be in order to qualify for Aid and Attendance benefits. The most commonly mentioned asset amount was $80,000, but there was never a written rule that stated this, and this resulted in VA claims processors applying inconsistent asset limits throughout the country.
On January 23, 2015, the VA introduced proposed rules that would resolve this inconsistency. That’s the good news. The bad news is that the proposed rules included a 36-month look-back period for asset transfers, otherwise known as “gifts.” If an applicant transferred assets within the look-back period, VA would impose a penalty period. The penalty period would require an applicant to wait a certain number of months, based on the value of the transferred assets or gift, before becoming eligible for Aid and Attendance benefits.
Many predicted that the proposed new rules would come into effect in 2016. This has not happened. However, due to the complexity of the rule and the large number of comments received, the VA does not anticipate publishing the final rule before summer of 2017. The VA has indicated that the draft final rule does contain several changes as a result of some of the public comments on the proposed rule. However, the VA has not formally approved the changes and has not discussed what those changes would be.
Because of the uncertainty regarding the rules, our firm will continue to monitor developments in this area. If you are considering applying for VA Aid and Attendance benefits, the sooner you begin the process, the better.