Mike (not his real name) finally decided he couldnâ€™t stay at home any more. He toured some local assisted living communities and found one he really liked. His family was somewhat shocked â€“ happy shocked â€“ but tried to move quickly before he changed his mind. His monthly cost would be $3400. However, his income was just over $2000 per month. He had few assets, one of which was his home.
Mike and his children came to me to see if I could help them find a way to afford this new â€œapartmentâ€. As a Korean War vet, Mike qualified for the VA Aid & Attendance benefit. The maximum benefit for a single Vet is $1788 per month. This monthly benefit combined with his income would be enough to pay for his place at the assisted living community.
The challenge, though, was what to do with the home. Under the VA regulations, Mike would qualify for the benefit even though he owned a home. However, if he (or his children) sold the home after settling into the new place, he would lose his eligibility (too many cash assets) and, therefore, lose the monthly VA benefit for more than a year. As an option, he could delay moving, sell the home and use the proceeds to pay for care until he spent enough to qualify for the benefit.
Since we wanted Mike to take advantage of this opportunity as soon as possible, I suggested that we use a Veteranâ€™s Home Protection Trustâ„¢ and apply for the VA benefit right away. The Veteranâ€™s Home Protection Trustâ„¢ is an irrevocable trust that removes the home from Mikeâ€™s estate for purposes of eligibility for the VA benefit. As soon as the home is in the trust, (and there is no look back period for the VA and no penalty for the transfer) Mike qualifies for the Aid & Attendance benefit. The children could sell the home from the trust later (when they are ready to sell) and the proceeds stay in the trust for Mikeâ€™s needs down the road. And, most importantly, Mike can move into his new â€œapartment.â€
This is just one example of how the VA Aid & Attendance benefit can help our war-time vets with the cost of care. At Idaho Estate Planning we understand how to maximize the benefit or avoid a denial. If you know of someone who could use this help, give us a call. We are VA Accredited and we know how to help veterans get the benefits they have earned through their greatly appreciated service to our country. Remember, good planning is no accident.