After years of debate and commentary, Veterans Affairs (“VA”) has issued its final ruling with regard to pension benefits changes. The rules go into effect on October 30, 2018. While numerous changes are in the works, of particular interest to VA planners is the implementation of a 3-year look back period, akin to the 5-year look back period for Medicaid benefits. Prior VA rules allowed persons seeking to qualify for benefits to transfer assets to family members, irrevocable trusts and/or certain annuities as appropriate and approved spend down mechanisms. New rules halt these practices in their tracks by penalizing those persons who transfer assets to the above within the 36-month period prior to applying for VA benefits. Trusts that can be liquidated or those over which the applicant maintains control will not be penalized; just as certain annuities converting retirement funds into an income stream are exempt (only the income is counted).
For those who would like to read the full text of the new rules, you can navigate to:
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