Veterans Asset Protection Trusts

They protect assets against spend-down requirements for eligibility for VA A&A pension benefits

They allow the veteran or surviving spouse to qualify for VA A&A pension benefits while still retaining control over some assets

They help protect assets from lawsuits and creditors

They facilitate the transfer of assets to heirs after the death of the beneficiary

They don’t Immediately qualify the veteran or surviving spouse for VA A&A pension benefits – there are certain eligibility requirements, including a means test and medical necessity requirement that must be met

They don’t provide complete protection – there is no guarantee that the assets in the trust will be fully protected in all circumstances

They don’t shield assets from estate taxes – assets transferred to the trust are still subject to estate taxes

They don’t allow the creator to have direct control over the assets – the trustee has the legal responsibility to manage the assets in the trust.

Asset protection: A VAPT can help protect assets from Medicaid’s and the VA’s spend-down requirements, which can be significant for families and individuals with substantial assets.

VA A&A pension eligibility: By transferring assets to a VAPT, the veteran or their surviving spouse may be able to qualify for VA A&A pension benefits while still retaining control over some assets.

Savings on long-term care costs: If the veteran or their surviving spouse requires long-term care, VA A&A benefits can go towards covering these costs, which can be very expensive.

Protection from creditors: The assets in a VAPT are protected from lawsuits and creditors, which can be comforting in uncertain times.

Flexibility for trustee: The trustee has flexibility in managing the assets in the trust, which can help optimize returns and protect them in the long term.

Eligibility requirements: Veterans and surviving spouses must meet certain eligibility criteria to qualify for VA A&A pension benefits, including a means test and a medical necessity requirement.

VA A&A pension limits: There are maximum dollar amounts available through the VA A&A pension, and the benefits received through the pension may not cover all long-term care expenses.

The look-back period: Similar to Medicaid, the VA has a 36-month look-back period before the creation of a VAPT. Any asset transfers made within this period may be subject to penalty.

The trustee: The trustee plays a critical role in managing the assets in the trust, so it’s important to choose someone who is trustworthy and has experience with managing trusts.

Medicaid implications: Depending on the specific circumstances, setting up a VAPT may affect an individual’s Medicaid eligibility.

Tax implications: Assets transferred to a VAPT are still subject to estate taxes, so it is important to take the tax implications into consideration when creating the trust.

Legal assistance: Like other types of trusts, a VAPT can be a complex legal instrument, so it’s important to consult with an experienced elder law attorney who specializes in VA benefits planning to ensure everything is set up correctly.