Veterans Information Service Warns Against “Pension Poachers”

The Veterans Information Service (www.vetsinfoservice.com) publishes an excellent annual guide called “What Every Veteran Should Know”, which it augments with a monthly Supplement.   The February, 2014 issue includes an article warning against financial advisors and others seeking to take advantage of Veterans who may be eligible for old age pensions.

A pension is available to veterans whose discharge was other than dishonorable, and who served during a period of war, if they meet the program’s income and asset guidelines. Those who are elderly or disabled, and who are homebound or require the regular aid and attendance of another may be eligible for an “improved pension.” Unlike Medicaid, there are no penalties for transferring assets in order to qualify for these benefits.  The newsletter reports that this feature may cause veterans to be the targets of “pension poachers,” who offer their services to Veterans with their own interests, rather than the veteran’s, in mind.  For example, these advisors may encourage veterans to purchase certain types of annuities, or transfer funds into irrevocable Trusts, without regard to whether the veteran meets other criteria of the program. Thus, the veteran would have relinquished control of his assets and still not receive the benefits.  And even if the veteran does qualify for the VA pension, he may have made it difficult for his spouse to access the funds after the veteran has passed away.  And, because Medicaid does impose a penalty for transfers to irrevocable Trusts, the veteran could find that he is disqualified for these benefits if the VA pension is not sufficient to cover the cost of his care.

There are many reputable financial advisors whose products and services are an appropriate part of  the strategy to find, get and pay for appropriate long-term care.  However, as reported in the article, the “poachers” often provide free seminars at senior living facilities and restaurants, the purpose of which is clearly to sell their own financial instruments, without regard to whether it is an appropriate strategy for each attendee. As a wise man once said, there is no such thing as a free lunch.”

 

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