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New VA Pension Transfer Penalty

What is a Transfer or Gift?

Veterans

A gift or a transfer is any activity that involves selling, gifting, and exchange of assets for a less amount than what is in the market. Also, a transfer could be a charitable asset transfer, such as a charity. However, this could be disputed if the total balance of the assets can be settled for the benefit of the claimant.

Initially, there are ways of protecting assets instead of giving money away. This is where an asset protection trust comes into play.

What Does All This Mean?

The changes to the transfers were carefully thought before their implementation. The transfers offer a considerable amount of money to a veteran or the surviving spouse that allows them to own a pension. This also means that in case anyone needs pension benefits, yet the assets are more than the assets cap; the person will be an irrevocable asset protection trust.

New Net Worth Limits

Initially, the rules required applicants not to have more than $80,000 countable assets for events. Moreover, the VA caseworkers habitually reduced this limit depending on the following facts of an applicant.

  • Age
  • Health
  • Marital status

The VA Commentary to the new regulations enables this observation and notes that the view is unfair. It is worth noting that by now, the VA has rented the federally-mandated Medicaid Community Spouse Resource Allowance (CSRA) to act as a net worth limit. The CSRA is a set amount by the Centers for Medicare and Medicaid Services on an annual basis. It is used to regulate the level of countable assets spouses of a nursing home resident is permitted to retain at the same time qualifying for the nursing home resident for Medicaid. Currently, the amount paid is $126,300.

Transfer Penalties

Under the old VA rules, the transfer penalties we not there. This meant that a spouse could transfer exceeding assets and apply for VA benefits as soon as possible. Now, the implementation of asset protection is essential to the qualification of Medicaid.

We suggest speaking with an experienced asset protection attorney to be sure you are well informed. The Mattar Firm is here to help. Contact us today by calling (239) 222-2222.

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