The
House of Representatives passed new legislation on October 29, 2013, that would
restrict the ability of our veterans (and the many financial and legal
advisors who assist them) to qualify for benefits by positioning their assets
with children, trusts or annuities. The measure would require the
implementation of a three-year look back similar to that imposed in Medicaid
planning.
First,
it is important to understand how and why this legislation came into
existence. First, How: Legislation is created and titled in
order to get the maximum number of votes from our elected officials. Do
you think the Affordable Care Act would have passed even through one party if
it had been called 'The Unaffordable Care Act That Will Cause Millions to
Lose Their Health Insurance Bill'? Of course not . . and this one is
no different. It was sold to the legislature as an act To improve the processing of disability claims by the Department
of Veterans Affairs, and for other purposes.
Sounds good, right? In fact, it sounded so good that it passed the House
of Representatives with only one vote against it. Now, however, the bill
moves to the Senate Armed Forces Comittee where it is being reveiwed for
content, and where clauses like the look-back period are being
scrutinized. As the bill is reveiwed in committee, recommendations are
made to address the shortcomings of the legislation, and this one has
several. NOT included in the consideration of adding the look-back
provision are issues related to spousal impoverishment (contrary to good public
policy), stipulations on the effect of prior planning, trust creation, a phase
in period, etc. These things will need to be hammered out and the revised
bill returned to the House for review and passage by both houses of
Congress. This process could take a while. In the meanwhile, groups
such as the National Academy of Elder Law Attorneys and others are talking to
Senators to make certain that if a look-back is approved, rules are clear and
understandable.
Now, the
'Why': The Joint Armed Services Committee held hearing in June of 2012
addressing the planning that is being done to assist veterans and their spouses
in obtaining these benefits. The VA did not like the planning as
it was being done. The committee members, however, reminded the VA
that planners (legal and financial) were just applying the rules that existed
and that if they wanted different rules, offer the changes for consideration as
part of the legislative process. All of these changes were wrapped into
one piece of legislation that also addressed the backlog of claims that the VA
currently has. Who doesn't want the VA to clean up its act and catch up on
the backlog of claims - some over 15 months old? And thus we
have this bill. Now, imagine if they had said it was 'An Act to Limit
Access to Benefits for Wartaime Veterans and Their Spouse or Surviving
Spouses'. Do you think that would have gotten the same number of
votes? Of course not. Nor would it have likely received the same
consideration as a stand alone measure. Packaging was essential and
someone played it well.
Will the three year look back come
into existence? I believe the question is not "will it come into existence?" but rather "when will it come into existence?" Either way, such a change will not prohibit us from helping seniors obtain
benefits as they become eligible. We have been through similar
circumstances in Medicaid planning (most notably the DRA 2005 changes).
The good things is this . . .Whatever rules we have to live by, we will still be relied upon to assist families through the difficulties of
providing care for their loved ones. We will still get great satisfaction
by helping others. Will we be hurt? Not really. We will
still be needed. The people who will be hurt are the very people we
are trying to help . . .
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