VA pushing estate planning penalties on some veterans pensions

by | Mar 17, 2015 | Estate Planning |

In Texas and nationwide, many persons in private industry had to make adjustments to their estate planning over recent years as their pension plans took a hit from the recession and other economic pitfalls. The problem is now surfacing with respect to some veterans and their military pensions. VA benefits may be denied or discontinued under new rules, thereby making it imperative for some veterans to revise their estate planning strategies accordingly.

It appears that veterans over 65 with nonservice related pensions, and with income over $119,220.00,  may be singled out. Estate planning attorneys and investment advisers may have to make asset protection adjustments to estate plans previously created for some clients who are veterans. The same applies to new and future estate planning.

One elder law expert expressed that some veterans may lose significant funding now earmarked for long-term care planning. Elder care and nursing home costs can run as high as $80,000 per year. The VA claims that it is trying to preserve the funding capabilities for those veterans who truly need assistance. One result, however, may be to create a crisis among elderly veterans who have planned for long-term care with the VA pension playing a critical role.

The agency apparently intends to make changes without congressional approval. However, some legislators are questioning the proposed changes. One senator wrote that the VA’s proposals are against the intent of Congress. He questioned whether the pensions should be more restrictive than Medicaid qualifications, which allow the use of trusts and annuities to protect assets in long-term care plans.

Apparently, the VA wants to cut off pension benefits where such long-term tools are used for veterans to qualify them for pensions. It is unknown at this point what kinds of changes, if any, will definitely emerge. However, veterans residing in Texas and throughout the country may benefit by consulting with estate planning attorneys and financial advisors to keep abreast of developments and to see if estate planning changes must be made.

Source:, “Proposed Benefit Changes Could Hurt Veterans“, Cyril Tuohey, March 12, 2015