New VA Rules for A&A

The Veterans Administration recently updated its rules for veterans to qualify for needs based pension benefits. My November blog post, “Know the Rules When Applying for VA Pension Benefits” included information which is now outdated. This post discussed Aid & Attendance and Housebound Benefits, supplemental benefits available to low income veterans and their survivors under the Veterans Administration (VA) pension program.

On September 18, 2018 the Veterans Administration issued new rules regarding veterans and their survivors’ eligibility for the needs based Aid & Attendance program. The new rules went into effect on October 18, 2018.

The previous rules were not well-defined, making it both difficult for Veterans and their advisors to plan, and simpler for high net worth claimants to qualify. The rules are now more straightforward.

For need based programs, the VA has established a maximum net worth in order to qualify, and implemented a 36-month look-back period for the transfer of assets.

Veterans cannot have assets totaling more than $123,600.

  • This amount is also the maximum “Community Spouse Resource Allowance” allowed by Medicaid. It will increase when Social Security raises the cost of living allowance.
  • Net worth includes the veterans and certain dependents’ monthly income. Monthly income is multiplied by 12 months and added to the applicant’s assets.
  • Qualifying medical expenses can be deducted from income. The VA has clarified which medical expenses qualify.
  • The claimant’s primary residence and two-acres are exempt from the net worth limit. If the veteran or the surviving dependents own more than two-acres of land, other rules apply.
  • Vehicles used for personal transportation, personal items, household furnishings, and pre-paid burial plans are excluded from assets.

There is now a three year “look-back” period.

  • There may be a penalty assessed when a claimant transfers assets during the 36 months immediately prior to submitting an application. The penalty is a specified amount of time, based on the transferred assets, a claimant must wait before receiving benefits. Asset transfers include making gifts, setting up trusts and purchasing certain financial products.
  • The penalty period applies only to transfers of assets over the $123,600 asset limit. If a veteran’s net worth is less than $123,600 and he or she transfers some assets, there is no penalty. If the veteran’s assets total more than $123,600, he or she will be penalized for amounts transferred over the asset limit.
  • There are exceptions to the new transfer penalty rule such as when the claimant sets up a trust for a disabled child, or was a victim of fraud or unfair business practices related to the sale of financial products.
  • The penalty period cannot exceed five years.

This is a very general overview of the Veterans Administration’s changes to its Aid & Attendance program qualification rules. The VA has made many new points of clarification. If you or your loved one would like to explore or apply for VA pension benefits, I recommend consulting a Veterans Administration accredited claims preparer. For a searchable list of accredited preparers, which includes veterans’ service organization representatives, independent claims agents and attorneys, visit va.gov/ogc/apps/accreditation/index.asp 

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 A special thank you to Attorney Glenn Jarrett of Jarrett & Luitjens Estate & Elder Law in South Burlington, Vermont.

 

How to Choose a Credit Card

There are many credit card offers available to us.  They come in the mail, reach out to us in advertising, and are on display at airport and store counters. We know people who have found the best credit card ever and think we should have it too.

If you come across a credit card offer that seems really great, or you are actively looking for a new card, you will want to make your choice carefully.

The trick is to find a credit card that best suits your payment and spending habits.

Here are five things to consider:

1. Interest Rates

If you carry a balance on your card, you pay for borrowing that money. This interest can add up to a significant amount of money depending on the amount of your balance, how many months you carry the loan, and your interest rate. You want to look for a card with a low rate.

Some credit card offers give a grace period of several months with no interest when you transfer a balance. Pay attention to the length of the grace period and the anticipated interest rate once the grace period ends.

If you pay off your balance in full each month, the interest rate is less of a concern.

2. Annual fees

Some annual credit card fees are pretty hefty. If you are considering a card with such a fee, analyze whether the card’s benefits will at least cover the fee. If, for example, the annual fee is $250, will you make enough use of the perks or spend enough on qualifying purchases to earn more in rewards than the annual fee? There are plenty of cards with no annual fees that offer decent rewards.

3. Rewards

Reward cards benefit people who pay off their credit card balance in full each month. If you carry a balance, the amount you pay in interest could be more than the rewards.

There are many types of reward cards. Look for one that matches your spending. Do you use your credit card frequently for travel and restaurants? Or, do you spend primarily on gas or groceries? Consider the complexity of the rewards program. Do you need to navigate a confusing point system to claim your rewards?

4. Cash Back

Cash back credit cards without complicated point systems are often the simplest to understand. These cards give you back a percentage of what you spend with the card. Some cash back cards credit the amount you earn to your statement, reducing your payment. Others send it to your bank account for you to spend. Some give you a choice. As with reward cards, these cards benefit consumers who pay their balance in full each month.

5. Brands

Credit cards tied to a brand, such as an airline, hotel chain or retailer, work best for people loyal to that brand. If you typically search for the best deal, a credit card tied to a brand is probably not a good choice. You may not spend enough to qualify for the rewards.

With so many credit card programs available, I recommend you determine what is most important to you. Then look for cards with that feature at the lowest interest rate possible.

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Know the Rules When Applying for VA Pension Benefits

The Veterans Administration provides many benefits for our veterans. While many of us are familiar with health care benefits, the VA also provides home loan guaranties, education assistance, and employment assistance programs, to name a few. One important benefit for low income veterans and their survivors is the pension program.

The Veterans Administration (VA) pension program is needs-based, and is designed to provide supplemental income to veterans and their survivors when the veteran:

  • Was honorably discharged
  • Served during a period of war
  • Has low income and few assets
  • Meets age and/or disability requirements

When veterans and their survivors qualify, their VA pension be supplemented with additional funds under the Aid & Attendance and Housebound benefits. These benefits assist people who are housebound due to disability, have limited vision, are confined to nursing homes, and/or need the help of another person to perform personal functions.

When applying for benefits, you can submit an application yourself or seek assistance.

When seeking assistance, you will want to know the VA’s rules.

Authorized claim preparers

An individual helping to prepare your claim must be accredited by the VA. This ensures applicants for VA benefits receive qualified assistance in preparing and presenting their claims.

The VA accredits three types of individuals:

  • Veterans Service Officers who are affiliated with VA-recognized veterans service organizations (VSOs)
  • Independent Claims Agents
  • Attorneys

Claim preparation fees

Fees can be charged only in certain instances.

  • Veterans’ service organizations provide free assistance with filing a VA pension claim.
    • VSOs include The American Legion, Military Order of the Purple Heart, Vietnam Veterans of America, Disabled American Veterans, Veterans of Foreign Wars, AMVETS, and Paralyzed Veterans of America.
  • Accredited attorneys and claims agents may not charge a fee for preparing and presenting a claim.
    • Preparing and presenting a VA claim includes gathering the necessary information, completing the application, submitting the claim to the VA, and communication with the VA on behalf of the claimant.
  • Accredited attorneys and claims agents may charge a pre-application consultation fee. The rules around this are tricky.
  • If you go for a consultation and say you intend to file for VA pension benefits, the accredited consultant may not charge you.
  • If you say you are exploring the possibility without expressing an intent to file, they may charge a fee for general advice about possible eligibility for benefits.
  • If the VA denies your claim, attorneys and claims agents may charge for work done after you file a “Notice of Disagreement.”

Sales of financial products

If an attorney or a claims agent is also a financial planner, he or she may not use the VA accreditation to sell or promote financial products.

Reducing your assets to qualify

Some organizations sell financial and estate planning services, such as annuities and trusts, to help veterans lower their assets to qualify for the pension program. The VA frowns on this practice.

The VA is well aware some people abuse the intent of the pension program by reducing their assets before submitting an application. In response, to “maintain the integrity of the pension program” the VA has proposed a 36 month “look back” period for calculating benefits. If implemented, the VA would scrutinize and question any asset transfers (including the establishment of trusts and the buying of annuities) in the 36 months preceding the claimant’s application for benefits. Disallowed transfers could lead to penalties not to exceed ten years. In the meantime, an attorney familiar with the VA’s rules should be consulted before transferring any assets to qualify for pension benefits.

If you or your loved one is considering applying for VA pension benefits, you want to be aware of the VA’s rules around the application process. You do not want to make any unnecessary payments for application preparation, and you do not want to make any mistakes that could jeopardize your application.

The VA pension benefit program has many details, rules and nuances. This blog is a general overview only. Please use the following links for more information and to locate resources in your community:

General overview of Veterans Administration benefits: https://www.benefits.va.gov/benefits/

Detail and eligibility on Veterans pension benefits: https://www.benefits.va.gov/pension/vetpen.asp

Detail and eligibility on Aid & Attendance and Homebound benefits: https://www.benefits.va.gov/pension/aid_attendance_housebound.asp

Information on how to apply for pension benefits: https://www.benefits.va.gov/pension/index.asp

Searchable list of accredited VSO representatives, agents and attorneys: https://www.va.gov/ogc/apps/accreditation/index.asp

VA Publication, What Veterans And Their Families Should Know When Applying For Department Of Veterans Affairs (VA) Pension Benefitshttps://www.benefits.va.gov/PENSION/Pensionprograminfo.pdf

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Estate Planning: Not a Game of Hide and Seek

This week’s blog is a guest blog from Attorney Jennifer Luitjens of Jarrett & Luitjens Estate & Elder Law.

Games are usually a lot of fun, but you don’t really want to play hide and seek with your estate planning documents.  After you have signed and implemented your plan, you may want privacy, but you should not hide your documents from everyone.  If you excel at concealing, it may not be found when needed.  How and with whom you share will depend upon the document and your goals, but here are some considerations:

Will — while this document has no effect until after death, it has zero effect if never discovered; you can store the original:

  • In a fire-proof safe at home, if someone else knows location and its key
  • In a safe deposit box at a bank, if someone else has joint access and a key to the box; without a surviving joint owner, no one will be allowed in the safe deposit box after your death without Court authority; if the joint owner cannot locate a key, there will likely be additional procedures and costs involved in accessing the box
  • At the Probate Court in the county in which you live, for a modest fee (currently $30); however, if you move out of the county or update your will, it will be necessary to either retrieve your original will or replace it with the updated version

Trust — a revocable living trust is effective during your lifetime, and the Trustee may need to produce a copy of it, or a Certificate of Trust, when managing its assets.  While you may be your own Trustee, if you resign, become incapacitated, or die, a Successor Trustee will need to have a copy.  A copy is often acceptable in place of an original, but either should be stored as follows:

  • In a fire-proof safe (see prior Will discussion); or
  • In a safe deposit box (see prior Will discussion)

Power of Attorney — although a financial Power of Attorney is extremely powerful and susceptible to abuse by the named agent, it is only effective during your lifetime, and its existence should at least be known to a trusted individual.  Many powers of attorney are effective immediately and do not require a determination of medical incapacity, but they have no useful life if undiscovered.  Copies will often be accepted, but an original is sometimes necessary, such as for recording purposes.  The original, and any copies, should be stored as follows:

  • In a fire-proof safe (see prior Will discussion); or
  • In a safe deposit box (see prior Will discussion)

Advance Directive — an advance health care directive (Living Will) also grants an enormous amount of decision-making power to the named agent, but it cannot override the wishes of the patient.  To ensure it is available when medically needed, you should share it as follows:

  • With your medical provider;
  • With your named agent(s); and
  • Filed with Vermont’s free Advance Directive Registry

Jennifer R. Luitjens is a partner at Jarrett & Luitjens Estate & Elder Law in South Burlington, Vermont. She is certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation (NELF), a non-profit organization accredited by the American Bar Association.  Please visit her at https://vtelaw.com/

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

 

Plan Now for the Holidays

It’s time to plan for the holidays. “Wait a minute,” you might think. ”School just started and Halloween hasn’t yet arrived! Why should I think about the holidays now?”

Without planning, the holidays, which I will define as the period of time from Thanksgiving through New Year’s, can put financial strain on families. When unprepared for the additional expense, many people overspend. They put purchases on credit cards to be paid off later with significant interest. This can make the holidays quite expensive and stressful. It does not have to be this way.

The first thing to do is to make a plan. Consider all the categories of expenses associated with the holidays. In addition to gifts, there are special foods, parties, entertainment, travel, charitable donations, etc.  Make a list of all your anticipated spending categories and determine how much money you need for each one. For gifts, write down how much you will spend on each person. Total it up. This is the amount you need to save between now and the end of the year.

One source of money is your paycheck. Divide the total amount you need by the number of pay periods remaining this year. This is the amount you will need to contribute each pay check between now and the end of December. If it is too much, go back and reevaluate each category.

Another source of money is rearranging your current spending. If you can reduce one expense, you can earmark the savings for the holidays. Say you spend $40 each week for dinner in a restaurant. If you switch to dining out every other week, you could save $1,040 in 12 months. Eliminating a $5 daily weekday sandwich or specialty coffee can save $1,300 a year. Are you paying for services you don’t use or are under using? Consider eliminating that expense or switching to a less expensive plan. Finding one way to reallocate your money can go far in helping to cover holiday costs.

You can also reduce holiday expenses. Then you will need less money overall. Here are some ideas:

  • Gifts: Can you give fewer gifts? With extended family, adults can draw names, or perhaps only the children receive gifts. Some people on your list might appreciate a gift of time. Agree to price limits.
  • Decorating: You can find holiday decorations in your home and backyard. Use every day items in unique ways or add festive bows and ribbon. Check out second hand stores. Find creative ways to wrap gifts and reuse gift packaging. Magazines and sites such as Pinterest offer ideas.
  • Entertainment: It is fun to go to the theater and attend concerts at holiday time. Can you find free performances? Consider other low-cost types of entertainment. You can go sledding or ice skating, watch classic holiday movies, bring friends or family together to bake cookies, drive around in the evening to look at holiday lights, or find a place to volunteer.
  • Parties: Consider renting or borrowing a special holiday dress instead of purchasing it. Hold a pot luck. Throw a dessert party instead of a dinner party. Use costly ingredients, such as expensive meats, as side dishes. If you have freezer space, buy food in advance when it is on sale. Cook from scratch and use seasonal foods.

Saving for the holidays is easier when you open a dedicated savings account. You can have money automatically transferred to your holiday account regularly. If you fear you will raid the funds for non-holiday spending, make the account hard to access and don’t get a debit card.

Once the holidays are here, follow your plan. When you shop, stick to your list. Leave your credit card at home and use cash. Shop on a full stomach. Avoid opening store credit cards as they typically have very high interest rates. Use coupons, reward points and discount offers on social media.

It’s important to write down on paper every purchase and keep a running tally. While this is work, it helps prevent overspending. If you spend more than you planned in one category, reduce your budget in another.

Once the holidays are over, keep your special savings account open and continue to add to it each month. When the holidays roll around again, you will already have the funds.

Although it is early, I wish you Affordable and Happy Holidays!

 

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

New Law Allows You to Freeze Your Credit for Free

In response to the massive data breech last year at Equifax, a new federal law will allow you to place a freeze on your credit file at no cost. Currently, you must pay a fee to do so. The law takes effect September 21, 2018.

Equifax, Experian and Transunion are the three major credit reporting agencies in the United States. They gather personal and loan payment information on anyone with credit. This data is factored into decisions such as whether you receive loans or credit cards, your credit limits, your interest rates, and the cost of your insurance premiums.

It was estimated about 143 million Americans – about half the population of the United States – had their personal information stolen during the 2017 Equifax data breech. This information, including names, social security numbers, birthdates, and some driver’s license numbers, is in the hands of thieves, available for them to use at any time – now or in the future.

One way to protect yourself is to place a credit freeze on your credit file at each of the three credit reporting agencies. A credit freeze restricts access to your credit file. Most creditors look at your credit report before they approve a new account or loan. If they don’t have access to your file, they may not extend the credit, making it more difficult for a thief to open an account in your name.

Currently, there is a fee, determined by each state, to place a freeze on your credit file. You need to pay this fee to each agency. And, when you want to temporarily lift the freeze to apply for a new loan, you pay another fee.

Beginning September 21, Equifax, Experian and TransUnion may no longer charge fees to place and lift a freeze on your credit file. Each agency is required to set up a webpage for requesting fraud alerts and credit freezes.

The new law, called the Economic Growth, Regulatory Relief, and Consumer Protection Act, also:

  • Allows you to place a place a credit freeze on a child’s credit file, regardless of where you live. This applies to children under age 16. Currently, only some states allow you to freeze a child’s credit file.
  • Changes the length of an initial fraud alert to one year. A fraud alert is a note in your credit file warning creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you. Currently the initial fraud alert only lasts for 90 days, after which you need to extend it for another 90 days. There are no fees for a fraud alert. If your identity has been stolen and you have filed a report with the Federal Trade Commission, you can still place an extended fraud alert on your file which lasts for seven years.
  • Requires the three credit reporting agencies to offer free electronic credit monitoring to all active duty military members.

The web addresses for each credit reporting agency are:

When you set up your credit freeze, each agency will give you a PIN which you will need to lift the freeze in the future. Keep the PINs in a safe place.

When you sign up for a credit freeze online, you will be asked a series of questions based on the information the credit reporting agency has in your file. Many of my clients have been unable to answer the questions, usually because they can’t remember the details of past loans. I have found it helpful to have a copy of a recent credit report on hand. The answers can usually be found in the reports.

To request a credit report visit annualcreditreport.com. You can also call 1-877-322-8228 or request reports by mail using the Annual Credit Report Request Form. Click here to access this form.

If you would like information on additional ways to project your personal information, read my blog post How to Protect Yourself Following the Equifax Security Breach.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Five Ways to Help Your Parents Keep Their Financial House in Order

Many times, our parents don’t need (or want!) someone to completely take over their checkbook. Sometimes all they need is a little help. If they are willing to share information with you, here are five ways you can provide assistance while helping your senior maintain independence.

1. Review the incoming mail with your parents. Many times, seniors need reassurance and assistance to sort the junk from the real mail.

2. Respect your parents’ comfort level with on-line banking. Many older seniors have never used a computer and neither understand nor trust the internet and the web. Others have fully embraced these tools. If computers are out, keep with what your parents are comfortable – most often paper checks and paper statements. With proper documents (i.e. a power of attorney), you may be able to have on-line access to their accounts to help keep track of their transactions.

3. Ask your parents to record every check in their register including the payee, purpose and amount. If this is difficult, have them use check carbons and make notes in the memo line. This helps keep track of how money is spent and spot potential financial abuse.

4. Assist with maintaining their checkbook register. Verify all checks and deposits are recorded. Check that the math is correct. Reconciling is the best way to confirm the register balance is accurate and to locate any bank mistakes.

5. Review monthly bank and credit card statements together. This will help protect your parents from fraud and unintentional purchases.

These money management practices will help your parents keep their financial house in order. These are good techniques – for anyone of any age – to maintain an accurate checking register, and to help protect themselves from fraud and abuse.

 

This blog is published to provide you with general information only and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Five Tips to Help Your Parents with Technology

Adult children frequently assist their parents with choosing and setting up computers, cell phones, and other electronic devices.  Sometimes this is successful for the senior. Other times it’s not.

More than once I have witnessed an older client’s family member help the client select or set up a device. After the family leaves, the client can’t use it.

This happened recently with Sarah who is in her eighties. When Sarah’s daughter visited recently, she helped her purchase a smart phone. Sarah told me her daughter loves this particular phone. She travels internationally for work, and her phone, I’m sure, is an essential business tool. Sarah, however, doesn’t need or want all the functions her daughter uses. Although she only wants to make phone calls, she can’t use her new phone. Sarah has two obstacles: her arthritic fingers make it a challenge to press the buttons and swipe in the right places, and, she can’t remember the steps to make a call or look up a contact.

Another client, Janet who suffers from the early stages of dementia, wants to e-mail her friends. Her son set up e-mail on her laptop in such a way that Janet first needs to open an internet browser, then locate her e-mail program. Janet can’t do this. If the e-mail program doesn’t launch immediately when she opens her browser, she cannot remember how to navigate to it.

I believe my clients’ family members mean well and are truly trying to help. They haven’t considered, however, their parents’ needs and abilities.

If you find yourself helping an elder with technology, I encourage you to keep these five thoughts in mind:

1. Understand many older adults are uncomfortable with technology – even when they already use it. To many people, computers are not at all intuitive, and they fear what will happen if they press the wrong button. (This isn’t true of every senior. I have met 90-year-olds who solve tech problems and teach people thirty years their junior how to use cell phones and computers.)

2. Be clear on what your loved one needs the device to do. While you may be transferring money, checking your home alarm system, or sending photos to a note taking program, your senior may only want to make phone calls, type letters, or send e-mail.

3. Take into consideration your loved one’s physical and cognitive limitations, and help him choose a device appropriate for his needs and abilities. Consider computers and phones designed specifically for seniors.

4. Set up the most direct path to the programs she wants to use. If you don’t know how to do this, seek out someone who can help.

5. Plan to spend time teaching or find someone who can teach your loved one to use his technology.

I believe it is important to be selective when choosing a helper or teacher. Many of my clients have experienced the exasperation of technology-savvy helpers when my clients do not “get it” on the first try. (This is especially true when they go to tech support offered at many stores.) A good helper understands seniors did not grow up with computers, many don’t have an intuitive sense on how to use them, and, if they are experiencing memory decline, need to be shown and be able to practice over and over again.

The names of the individuals in this article have been changed to protect their privacy. This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.