In this final installment, we will focus on additional VA benefits planning strategies.
One effective strategy is commonly referred to as “spend down”, whice simply means to use otherwise countable liquid assets to purchase needed items such as vehicles, medical equipment,, etc.
The VA allows for the reduction in countable financial accounts simply by adding another person on the account. Joint ownership has its perils, however, and it is not effective for Medi-Cal purposes. One should proceed with caution concerning this strategy.
The treatment of tax-deferred accounts poses special problems. While the annuitization approach may work in certain circumstances, in others, it may be better to liquidate the account and transfer it. Howevever, tax considerations here are important.
Experienced and qualified elder law attorneys who are familiar with VA benefit and Medi-Cal planning sometimes include in their strategies the creation of certain types of irrevocable trusts. When properly structured and, these trusts can be effective tools for planning for both benefit programs. In a common situation, a two trust strategy is used: one for the personal residence and one for the non-residence assets. This is due to the differing tax considerations for these differing assets.
In summary, the VA offers several important long term care benefits for veterans and their surviving spouses. When planning for these benefits is properly pursued, substantial financial benefits can be reaped.
WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics. It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals. For such advice, seek the counsel of an experienced and qualified elder law attorney accredited to practice before the VA.