Have you ever gone on vacation and been approached to attend a “free lunch” to hear about purchasing yearly housing opportunities in that location? Veterans and their surviving spouses are being approached in a very similar way.
In a 2007 report, the Securities and Exchange Commission and Financial Industry Regulatory Authority found issues with 110 securities firms that presented free lunch seminars. Most of the time they are sale presentations, despite the fact majority were advertised as “educational.”
The report went on to state that 50 percent of these meetings featured misleading advertising; 23 percent involved possibly unsuitable recommendations; and 13 percent appeared to be fraudulent.
Across the U.S., financial advisors are hosting seminars in local nursing homes and assisted living facilities in hopes to get a big commission check. The advisors claim they can “help” the senior receive a VA benefit known as Aid & Attendance all for FREE.
The Aid & Attendance benefit is for certain veterans who served during wartime and their spouses. In qualifying for the benefit, a veteran’s assets are considered. Generally, those with assets more than $80,000 are excluded. Deceitful advisors often shape the presentation into “educating” seniors who are too well off to qualify and how to reposition their assets using an annuity in an irrevocable trust in order to meet the benefits threshold.
The Aid & Attendance benefit was not designed to assist wealthy or even moderately wealthy retirees. The issue is that seniors could jeopardize their chance to qualify for Medicaid if their finances and health deteriorates. In Illinois, Medicaid requires applicants to provide an overview of their assets over a five year period. Purchasing an annuity would be categorized as a nonexempt transfer, and would preclude the veteran or surviving spouse from qualifying for Medicaid benefits.
Back to the issue of “FREE” help. VA regulations do not allow someone to charge to complete the paperwork for VA benefits. I have heard locally that some advisors are telling seniors that they have a local attorney that will set up the irrevocable trust for only $2,000. The advisors also tell the senior that the do not charge for their help, but do not disclose they get paid from the purchase of the annuity. According to an AARP report on investment fraud, a $500,000 annuity sale could generate a $75,000 commission.
The Aid & Attendance benefit is to assist those veterans who do not have the financial resources to cover their medical or in-home health care needs. If you are looking for help in applying for or appealing a decision on the A&A benefit, avoid people who start talking about annuities and trusts instead of looking at your real income and expenses and assets to see if you legitimately qualify.
U.S. Senators Ron Wyden, D-Ore., and Richard Burr have introduced a bill in Congress called the “Veterans Pension Protection Act”. The bill will create a 36 month look back of financials for all VA benefits to hopefully stop these pension poachers.
The VA has asked if you are approached by any organization to report them to the VA Office of General Counsel at 708-202-2216.
Here are some organizations that have been found locally to be aware of: Wartime Veterans of America, Vets LLC.
If there is ever a question regarding entitlement to VA benefits, I can be reached at 815-937-8489.