“Aid and Attendance” is an income-tax free special monthly pension available to wartime veterans and their surviving spouses. The monthly pension available ranges from $1,056.00 to $1,949.00. The United States Department of Veterans Affairs (the VA) administers the program. The receipt of these funds can help a veteran or their widow pay for long-term care without spending all of their money. That is important, because once the older person’s money and assets are gone, their care options can be extremely limited.
One of the factors the VA considers when processing an application for Aid and Attendance is the amount of the claimant’s estate and net worth. A “claimant” is either the veteran or their surviving spouse. The VA’s rules define corpus of the estate and net worth to mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant, except the claimant’s home, including a reasonable lot area, and personal effects. Personal property means all tangible property that is not land.
In regards to a home, in general this means you can own a home and obtain Aid and Attendance. However, if the home is sold, the cash proceeds received from the sale are countable and could disqualify a claimant from continuing to receive Aid and Attendance. This can be avoided by transferring title to the home to a properly drafted irrevocable trust for VA purposes before applying for Aid and Attendance. In regards to personal property, generally clothing and household furniture and furnishing would not be countable for Aid and Attendance qualification purposes. However, personal property that could be considered an investment, such as a coin collection, would be countable.
In processing an application for Aid and Attendance, the VA will determine whether or not the claimant’s financial resources are sufficient to meet the claimant’s basis needs without receipt of the special monthly pension. If the VA determines that the claimant’s assets are sufficiently large that the claimant could live off the assets for a reasonable period of time, the clerk who is processing the application can deny it. This is a subjective standard and there is no specific dollar amount that can be designated as excessive net worth. The VA’s rules provide they are to consider the facts and circumstances in each case. Variables to consider are the claimant’s income, expenses, life expectancy and the extent to which assets can be converted into cash to pay for the claimant’s needs. These needs will typically include unreimbursed medical expenses, including the cost of home health care, assisted living care, or nursing home care.
As such, before applying for Aid and Attendance, it is a good idea to make sure the veteran or their surviving spouse qualifies first. Do not apply to see what will happen, especially if you are acting as a fiduciary for an older person as their agent under a Power of Attorney or as successor trustee of their revocable living trust. An elder law attorney who is also accredited by the VA can assist in calculating the claimant’s net worth for Aid and Attendance purposes before an application is submitted, thus increasing the chances that the application for the pension will be approved. If a veteran who is living in an assisted living facility that costs $4,000 to $6,000 a month receives the monthly $1,644 Aid and Attendance pension, the receipt of these funds can help the veteran avoid becoming out of money, and out of options, thus enhancing their well-being by not having to move to another facility and avoiding a financial crisis in the family.
Andrew Byers is an Elder Law attorney in Auburn Hills, Michigan and is accredited by the U.S. Department of Veterans Affairs. Assisting veterans and their surviving spouses with long-term care planning and Aid and Attendance are part of his Elder Law practice.