Benefits Planning for Veterans

The US Veterans who are preparing to retire have access to a variety of benefits programs, both short-term and long-term, for financial support and care. Programs include but are not limited to:

• Veterans’ Health Care and Veterans’ Pensions
• Survivor’s Death Pension
• Housebound Pension
• Aid and Attendance Pension
• Disability compensation
• Burial benefits
• And more

Which Program is Right for You?

Identifying the right programs for your retirement situation is crucial since certain Veterans’ benefits can disqualify you from other VA programs and Medicaid. An estate planning attorney specializing in Veterans’ benefits can assess your unique needs and optimize Veterans’ benefits while complementing your non-Veteran assets and pension eligibility status.

Expert guidance when selecting benefits programs and filing the required documents with each application dramatically increases the chances of first-time VA approval. An application rejection can take months, even years, to overcome. Your Veterans’ attorney will know your submitted paperwork is correct and complete, including documentation of wartime service and discharge papers. Other paperwork includes marriage or divorce certificates, proof of unreimbursed medical costs for items like health insurance premiums, adult daycare or home healthcare, and nursing home or assisted living care.

Restructuring Assets Before Your Apply

Aside from identifying and applying for benefits, your Veterans’ attorney may find a need to restructure your finances if your net worth (annual income plus assets) is too high to receive pension benefits. Until November 30, 2022, the net worth limit is $138,489, including the income and assets of your spouse if you are married.

Much like Medicaid applications, there is a look-back period. In the case of the VA, this evaluates the previous 36 months for needs-based benefits. Past asset transfers during this time receive a review. If you sell assets for less than fair market value or gift them to meet the VA net worth limit, you will have a period of benefit ineligibility. There are methods to restructuring your assets that do not violate this look-back period.

Protecting Your Medicaid Eligibility

Additionally, your attorney can restructure your assets without jeopardizing your eligibility for Medicaid. Medicaid financial eligibility requirements are generally more strict than VA benefits, so your financial changes need to address the potential for both VA and Medicaid benefits. You may also use qualified unreimbursed medical expenses to lower your countable income. How your finances and assets are structured and managed is key in maintaining benefit eligibility.

Benefits for Spouses and Children

If you have a disability, you don’t necessarily have to be 65 to become eligible for a Veterans’ retirement pension, depending on active service requirements, net worth, and income. Your surviving spouse and children who are unmarried and dependent may also be eligible for VA pension benefits.

Know the Date You Joined and Length of Service?

The program looks at what year you entered the military to determine if pension benefits are either under the military’s Blended Retirement System – BRS (joined on or after January 1, 2018) or the legacy High-3 system (joined before January 1, 2006) without switching to the blended system by the 2018 deadline.

The BRS combines a traditional benefit pension with a contribution plan similar to a 401(k). Known as the thrift savings plan (TSP), it allows the traditional pension to be available after 20 years of military service, and both you and the government contribute during this time. You become fully vested after two years and, at the age of 59 ½, can withdraw money without tax penalties. The High-3 is a benefit pension plan providing benefits after 20 years of service equal to 2.5 percent average basic pay for your three highest-paid years, multiplied by the number of years of your service. The more years you serve, the larger your pension will be in this configuration.

The numerous financial and health benefits available to Veterans require careful planning to optimize all programs in coordination with federal and state programs such as Medicaid. Arrange your finances to receive the most benefits and address your unique needs. Your Veterans’ attorney knows how to approach your current situation and when updates need to occur. Adapting to changing rules ensures you will receive the best benefits for yourself and your family.

If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.