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Friday, February 28, 2014

FIDUCIARY APPOINTMENTS BY THE VA

What is a Fiduciary and why does the VA want to appoint one for my dad?

George, a veteran of WWII who now lives in an assisted living facility, applied for Improved Pension with Aid & Attendance.  After a few months, the VA sent him a letter explaining that George had been awarded the Pension, but would not receive his retroactive check until the VA determined whether he was competent to handle his affairs and whether the VA should appoint a fiduciary to manage his checks. What is a Fiduciary and why does the VA want to appoint one for my dad?

George, a veteran of WWII who now lives in an assisted living facility, applied for Improved Pension with Aid & Attendance.  After a few months, the VA sent him a letter explaining that George had been awarded the Pension, but would not receive his retroactive check until the VA determined whether he was competent to handle his affairs and whether the VA should appoint a fiduciary to manage his checks. 

Often veterans or their surviving spouses applying for VA Pension or Compensation benefits have some mental disease or injury that affects their ability to manage their financial affairs.  Before the VA will issue payment, the VA wants to know that if the veteran or spouse cannot manage the money they receive from the VA, someone trustworthy will be able to manage their money for them. 

The VA may appoint an individual or a corporation to serve as a fiduciary, or may authorize someone who has been appointed by a court to serve as a fiduciary.  A fiduciary is a person or legal entity that has been appointed by the VA to receive VA funds on behalf of a beneficiary for the use and benefit of the beneficiary and his/her dependents.  See A Guide for VA Fiduciaries. A beneficiary is an individual entitled to receive VA benefits.    The definition of incompetent for VA purposes is a minor or an adult who is rated incompetent by the VA or is under a legal disability by reason of court action.

The VA first makes a determination based on the evidence submitted that the veteran or surviving spouse is not able to manage their money.   If the veteran or spouse wishes, they can tell the VA that they are incompetent and request someone they know and trust be appointed to serve as the fiduciary. 

Before the VA appoints the person, though, they will do what is called a “field examination” to check that the person is trustworthy.

A VA employee, called a Field Examiner, will interview the potential fiduciary to ask whether they are willing to serve, will check the person’s credit rating, do a criminal background check, and ask for personal references.  If the veteran or surviving spouse does not have anyone they trust, or if the VA finds that the person nominated by the veteran or surviving spouse is not trustworthy, the VA can appoint a corporate fiduciary.  In some cases, the VA appoints an employee of an institution, such as an assisted living or nursing home,  to serve as a fiduciary.

The fiduciary is responsible to oversee the veteran or spouse’s VA award, and is required to use the VA funds to pay the basic living expenses for the beneficiary and his or her dependents first, and to provide goods and services to improve the lifestyle of the beneficiary and dependents only once the basic needs are met.

George requested that the VA appoint his oldest son, John, as his fiduciary.  Once the VA investigated John, they made him the payee of George’s VA check.  John received George’s retroactive Pension payment, and now receives George’s monthly check.  John must keep the deposits separate from his own accounts and keep records of payments he makes for George from the VA funds. He also agreed to keep the VA informed of any changes in George’s residence or medical condition, and to file a Federal Fiduciary’s Account, VA Form 21P-4706b, every year.


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