Last week, we were approached by a gentleman from California on behalf of his 88 year old father. In April, 2009, Dad purchased a single premium annuity for an initial investment of $350,000.00. When the VA examined the veteran's 2009 federal tax returns, they discovered this asset and proposed that this amount of asset (counted as income by the VA), created ineligibility from the original claim date of June, 1, 2009. This means that the VA is proposing repayment of all benefits paid from June 1, 2009 through the present. VA has also stopped paying any new benefits.
This is an example of how seriously the VA is taking the issue of hiding assets to create eligibility. It may take the VA years to discover the transaction (creating a trust or purchasing an annuity), but they are very likely to find it and want their money back. The VA is a vicious debt collector and as the 900 lb. gorilla, they can do some really nasty things such as garnishing up to 20% of your Social Security check or seizing the financial assets of a fiduciary to secure repayment. While you can request a debt waiver from the Committee on Waivers and Compromises, in cases such as this, you can be almost completely assured your waiver request will be denied.
Believe me when I say, it's really a good idea to avoid advice from an elder law attorney or financial planner regarding hiding or sequestering assets. One mistake could cost you everything.
Want to know more, visit our sister website www.vascamalert.org for a detailed explaination of the whole VA scam issue.