Happy Veterans Day! What better way to start blogging at my new firm than to discuss one of my favorite topics. Our veterans deserve to be rewarded for their service to our country. Please share this post with a veteran that may benefit from a scenario I see all too often.

Those of you who have met with me or heard me speak to the public know how passionate I am about the VA Aid & Attendance program. It’s almost too good to be true. In short, the VA will provide a veteran (or the spouse of a veteran) up to $1949/month tax free to help pay for recurring medical expenses. Of course, there are very strict and complex standards which we help our clients work through. Here’s a typical fact pattern:

Joe and Betty have been married for 55 years and have always taken care of each other. Over the last two years Joe’s dementia has begun to rob him of some of his short term memory, but overall he is still capable of having a meaningful relationship with Betty. His needs have increased enough that he has an in-home aide three hours a day to help him with eating and toileting when Betty is too tired to continue her daily care giving. Their combined fixed income is low and almost all of it goes to paying the aide. For the first time in many years they are beginning to dip into principal and it is causing Betty, who is only now beginning to take over their finances, a lot of stress. She is worried that if Joe ends up in an assisted living facility or nursing home that she will become impoverished. In fact, her worries are well grounded in fact.

I explained to Joe and Betty that we can create a plan for them that will serve three purposes: First, our plan will allow Joe and Betty to qualify for $1,949/month, which will allow them to stop using principal for the time being. Second, our plan will protect their assets and allow them to apply for Medicaid before Betty is impoverished by paying for Joe’s care. Based on Joe’s prognosis, he will probably be able to live at home for at least three more years. Thereafter, if he needs to move to an assisted living facility he will need to pay for some time before Medicaid will provide for him. During that time the VA benefit will continue to help pay for his care. Betty will be able to hold on to most of her assets so that she has options as her health declines. Finally, as part of the plan we will execute their important estate planning documents, allowing them to choose who cares for them during their lives and how their assets are handled upon their death.

Joe and Betty sought advice at the right time – before they diminished their savings and before Joe lost legal capacity.

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