If you, your parent, your spouse, or other loved one served during an active period of War and may have need of the VA Aid & Attendance benefits in the future, the clock is running. Until now, veterans or their spouses who met medical qualifications could make transfers to lower their assets and allow them to qualify for such benefits. However, under the new regulations promulgated by the VA and just made final, the VA will be implementing, among other changes, a three year lookback period on transfers made of “covered assets” to an individual or a trust or an annuity if the inclusion of such assets would have caused the applicant’s net worth to be over the limit permitted under the new regulations. The penalty period for such transfers can be long as long as five years.
The good news is you can still make transfers to protected trusts with no lookback period and no penalty, but you have to act quickly. The new rules go into effect on October 18, 2018, and all planning and transfers must be completed by October 17, 2018.
Keep in mind, during the planning process consideration still needs to be made with regard to the possible future need for Medical Assistance which has a five year lookback period.
For more information on the current regulations in force through October 17, 2018, please refer to one of our previous articles on the subject: