Can YOU Become Eligible For A VA Pension?

Attorney Kellen Bryant explains the critical rule changes that now prevent veterans from creating artificial VA pension eligibility through asset transfers.

Question: “Can I create artificial pension eligibility by giving away part or all of my estate?”

This is a question many veterans and their families ask when they discover they have too many assets to qualify for VA Improved Pension benefits. The answer has changed significantly in recent years, and understanding these changes is crucial for proper VA benefits planning.

The Old Strategy That No Longer Works

After reviewing the rules about limited net worth, many people concluded that the quickest way to become eligible for VA Improved Pension would be to gift money to children or other trusted people.

This intuitive approach made sense under the old rules because:

• Reducing assets could quickly bring veterans under the eligibility thresholds
• There were no penalties for transferring assets
• Families could redistribute wealth to qualify for benefits

The Game-Changing Rule: October 2018

That intuition held true up until October 2018, at which time the VA enacted regulations prohibiting gifting and transferring assets within three years of VA benefits and Improved Pension applications.

This was a major shift in VA benefits law that caught many veterans and their advisors off guard.

What Changed

Starting in October 2018, the VA implemented new regulations specifically designed to:

• Prevent artificial creation of eligibility
• Look back at recent asset transfers
• Penalize veterans who gave away assets to qualify
• Align VA rules more closely with Medicaid planning restrictions

Understanding Look-Back Periods

Before October 2018: No Look-Back

Under the former law, there was no look-back period like there is under Medicaid law. This meant:

• Veterans could transfer assets without penalty
• No waiting periods or restrictions applied
• Asset transfers were a legitimate planning strategy

After October 2018: Three-Year Look-Back

Starting in October 2018, the VA regulations were summarily enacted to discover whether applicants for VA benefits had transferred assets within three years from the date of their VA benefits application.

Comparison to Florida Medicaid

For context, Florida Medicaid law requires a five-year look-back period starting from the date of the Medicaid application. The VA’s three-year look-back period is shorter but follows the same concept of preventing artificial eligibility creation.

What This Means for Veterans Today

The current VA regulations mean that veterans cannot:

• Give away assets to children or family members within three years of applying
• Transfer property or money to artificially reduce their net worth
• Restructure their finances through gifts to meet eligibility requirements
• Use the old “spend down” strategies that were once common

Any asset transfers within the three-year look-back period will be discovered and can result in a penalty period during which the veteran is ineligible for benefits.

Legitimate Planning Strategies Still Available

While gifting is no longer a viable strategy, legitimate planning options still exist:

• Spending on legitimate expenses like home improvements or medical care
• Purchasing exempt assets that don’t count toward the net worth limit
• Paying down debts to reduce net worth
• Planning more than three years in advance if possible

The Importance of Professional Guidance

With these rule changes, VA benefits planning has become significantly more complex. Veterans and their families need to understand:

• Current asset limits and eligibility requirements
• What transactions trigger look-back scrutiny
• Legitimate strategies that remain available
• How to avoid inadvertent disqualification

Key Takeaway

The days of simply giving away assets to qualify for VA Improved Pension are over. Veterans must now plan more carefully and further in advance, understanding that the VA will scrutinize any asset transfers made within three years of their application.

Put your mind at ease and make an appointment to meet with the Berg Bryant Elder Law Group in Jacksonville, Florida today to explore legitimate strategies for VA benefits planning under the current rules.

This information is provided by Attorney Kellen Bryant. For current guidance about VA benefits planning and eligibility strategies, consult with a qualified VA benefits attorney who understands the post-2018 regulations.

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