The VA and Medicaid landscape is ever changing, and always in favor of government. We wrote you last fall to advise you of the pending 36-month look-back for VA Aid and Attendance. The new rules would impose a 36-month look back and penalty period for transfers made by individuals applying for Aid and Attendance benefits. While previous versions of the bill have failed, the word is that the current proposed bill is likely to pass. To the best of our knowledge, the new law would take effect one year after the date of enactment of the Act and only apply to Aid and Attendance applications made after that date. It appears that transfers prior to the effective date of the law would be “grandfathered.”
The simple solution is to divest excess assets prior to the effective date of the proposed bill. The preferred method is to transfer assets to an asset protection trust outside the name of the veteran and the veteran’s spouse (if any). Funding an asset protection trust would also start the clock running on the current five-year Medicaid look-back.
With the high cost of caring for an aging U.S. population, we expect that elders will be asked to shoulder an increasingly large share of the cost of their care. Changes in the long term care insurance market have made insuring against such risks expensive and impractical. Seniors would be wise to self-insure against their eroding safety net by sheltering their assets in a way that preserves their nest egg as well as their eligibility for what government benefits remain.
Action Required: Please contact us if you are concerned about your long term care (especially if you had to go into a nursing home) or you or your spouse is a Veteran and you are contemplating either in-home care or a move to assisted living in the next few years.