Category: Veteran Benefits

Houston Elder Lawyer: Extra VA Benefits Are Available for Wartime Veterans to Help Pay for Long-Term Care

Long-term care is expensive, and many seniors in the Greater Houston area struggle to pay for the costs associated with aging and their declining health.  Fortunately for older veterans that served the country during a period of war, additional tax-free benefits may be available through the VA to help offset their out-of-pocket costs.

This benefit is known as the Aid and Attendance Pension, and it is a 3-tiered tax-free benefit for wartime veterans and their spouses who need financial assistance, or simply need help covering the costs associated with long-term care or un-reimbursed medical expenses.

Aid and Attendance is designed for veterans who need help with performing functions of everyday living including, bathing, feeding, dressing, toileting, etc. The benefit can even be used to pay a family member who oversees or provides the care for their loved-one.

There are 4 criteria for eligibility:  service, income, net worth, and medical expenses.  You do not need to have a service-connected disability to qualify.  The VA will look to ensure that you:

  • Are permanently and totally disabled, or 65 or older
  • The veteran must be honorably discharged
  • The veteran must have served at least 90 consecutive days, with at least one (1) day during a period of war.

How to Plan for Eligibility

There are strict income and asset requirements that must be met in order to qualify for Aid and Attendance benefits. However, even if you have assets or money in your name, you still may be able to secure Aid & Attendance benefits.  Similar to Medicaid, the government allows veterans to utilize financial tools and planning strategies with the assistance of an attorney in order to legally reallocate assets to fall within the VA’s guidelines.  Once approved, older veterans and their spouses can be eligible for up to $25,525 per year, tax-free, to help pay for their care.

Get Help When Seeking A & A Benefits!  

Our Houston elder attorneys recognize that securing A & A benefits and working with the VA can be difficult. Many veterans are turned away because they do not understand the VA’s rules or the planning available to help meet the VA’s asset and income requirements.  Our attorneys are available to assist you in order to determine the best legal and financial tools necessary to qualify and quickly help you get the benefits you deserve. To schedule a consultation, simply call our office at (281) 218-0880.

Create Your IRA Exit Plan

10-06-2016

IRAs, 401(k)s, 403(b)s and other qualified accounts are popular tools for building a retirement nest egg. But after investing and saving with one of these plans for the last 30 years, as retirement nears you may ask yourself, "What should I do with my retirement account?"

The most common advice given is to withdraw as little out of your IRA as possible while taking your Required Minimum Distributions (RMDs). MarketWatch, in its recent article, “IRAs are for retirement planning, not for retirement,” suggests that we should think a bit outside the box before simply following the masses, with regards to your IRA and its RMDs.

If your money manager is advising you to let your IRA sit and only withdraw the RMDs, remember that typically, money managers are making 1-2% in fees on the total amount of money under their management. As such, the money manager has a vested interest in you keeping most of your money under his or her care.

Here are few ideas:

If tax rates increase, qualified accounts don’t give you any protection from future tax liability. If you’re like most Americans who think that taxes will increase in the next decade, do you want to wait for your retirement savings to be taxed at a higher rate? If you're between the ages of 59 and 70½, you are at the perfect spot to start an IRA Exit Plan.

Another consideration is the way in which you’ve titled your IRA and the beneficiary designations. Talk with a qualified estate planning attorney when designating your primary, contingent, and tertiary beneficiaries, as well as when titling an IRA.

Remember that when you set up a trust, your IRA cannot be retitled to your trust. This inability to change ownership of your IRA can lead to gaps in planning for Medicaid and Veteran Benefits. The quick solution is to overcome this by simply changing the IRA's beneficiary to their trust. But beware—there can be dire consequences if your beneficiaries of your IRA are not done properly.

Talk with an estate planning attorney to be certain that the IRA's beneficiary is a trust that qualifies as "See Through Trust,” or else it can cost your families thousands of dollars in taxes by making it instantly taxable upon your death.

There’s no better time to start preparing yourself, as well as your investments, for retirement. Create your IRA Exit plan so that when you enter retirement your assets will be as ready for retirement as you are.

Reference: MarketWatch (August 17, 2016) “IRAs are for retirement planning, not for retirement”

Exploring Long-Term Care

The Huffington Post says that more than 40% of people over age 65 need care in a nursing home for some period of time. The article, “What is Long Term Care?”, quotes the National Institute of Health (NIH), which states that what’s termed long-term care (LTC) can—in reality—be a long time or a short time. Long-term care can be in an institution or at home, based on the patient’s specific situation and needs.

LTC is now a very broad term and has evolved into a term for the type of care required instead of the time period. The need for this care can be because of a sudden event like a fall, or it can develop gradually. Before someone reaches the point where total personal care is required for his or her activities of daily living (ADLs), other ancillary services might be necessary. There are adult day care and senior centers to help them socialize and keep active.

Even when elder care doesn’t mean admission to a facility, caregiving demands may make paid LTC with a home health aide a necessity. AARP found that more than 40 million Americans provided unpaid care to adults last year, with an average of 44. 7-27-20166 hours for spouses or partners. And 10 percent of those caregivers were elderly themselves—age 75 years or older.

Beyond an individual’s personal savings, long-term care insurance is available with many options and levels of coverage. It’s more affordable the earlier you sign on. LTC insurance will typically cover care not covered by health insurance, Medicare, or Medicaid. It can guard your savings accounts from becoming depleted by increasing healthcare expenses, and premiums may be tax deductible. LTC insurance can also eliminate the burden on family members who would be providing this care.

An elder care and estate planning attorney can help with strategies to help fund this care. Government programs like Medicare and Medicaid should be explored—as well as any veteran’s benefits and Social Security. In light of the expense of nursing home care and Medicaid eligibility requirements, elder law attorneys can discuss spending down assets to qualify for Medicaid.

Reference: Huffington Post (June 8, 2016) “What is Long Term Care?”

Make Sure You Receive All of the Benefits for Serving Our Country

Members of the military have special estate planning needs, particularly when they're deployed. These families also have access to special benefits and resources, says Kiplinger's May 27, 2016 article, "Estate Planning for Military Families." Here's a rundown: 7-19-2016

Sign up for low-cost life insurance. This is critical if you have financial dependents—even more so if you're heading into combat. Active-duty members of the military can purchase low-cost term life insurance, called Servicemembers' Group Life Insurance (SGLI). It costs just 7 cents per $1,000 of coverage per month—or $336 a year for the maximum $400,000—regardless of your age, health, or likelihood of being deployed. In addition, service members can also purchase $100,000 in coverage for their spouse for $60 a year if the spouse is under age 35. The coverage will cost more for older spouses.

Have your legal documents organized. You should create the legal documents such as a will (in which you'll designate a guardian for your minor children), a power of attorney, and a health-care proxy. The power of attorney can be used while you're deployed. It gives your spouse or another person you choose the authority to handle your affairs while you're on duty or out of the country.

Update beneficiary information. The beneficiary designations for your pension, life insurance, IRAs, and thrift savings plan take precedence over your will. Remember, if you designated a beneficiary when you first joined the service and haven't changed it since you got married, that original beneficiary could inherit your account. Update those designations with your spouse and review them when you have life changes like marriage, divorce, or the birth or adoption of a child.

Make survivor decisions for your military pension. If you qualify for a military pension, you'll need to think about whether to have your military retirement pay continue for your beneficiary after you pass away. You typically will pay 6.5% of the portion of the monthly pension payout you want your beneficiary to receive, which is deducted pretax from your retirement pay. If you're looking at this cost compared to the price of buying life insurance for your spouse, the policy would need to be permanent rather than term to be certain it would still be in effect when you die.

Utilize survivor benefits. One often overlooked benefit is the ability to roll over a military death gratuity or SGLI death benefit into an IRA even if it is greater than the $5,500 annual limit. While there are some restrictions, this and other rules can prove helpful to military families.

Reference: Kiplinger's (May 27, 2016) "Estate Planning for Military Families"