Veterans Financial to pre plan for a parent?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
sunny skies
Posts: 44
Joined: Wed Oct 03, 2018 6:10 pm

Veterans Financial to pre plan for a parent?

Post by sunny skies »

Does anyone have experience with a company called Veterans Financial? According to their email: "Veterans Financial, Inc is a private financial services company and therefore cannot guarantee eligibility for government benefit programs or provide tax or legal advice. The suggested strategy is based on information provided by family members and our 17 years experience helping people maximize their retirement savings to pay for long term care"

My 80 year old mother just moved into the independent phase of assisted living and had this financial planner call me to walk me through the steps of her financial planning to receive Aid and Attendance benefit for spouses who served during wartime. In addition, they said she would qualify for medicaid nursing home in 5 years if needed, and still keep her assests.

According to his plan, she is allowed to keep 34K, but has to move 215k to two separate accounts transferred to my name as I'm her son and power of attorney. The funds would then need to be moved to a gifted asset and reserve and family care provider contract.

The gifted assets and reserve states: These assets are expected to sit in reserve for many years, therefore we recommend a tax deferred annuity to avoid current taxation. Funds can be used to pay for care if needed. The remaining balance will provide an inheritance to the heirs.

The family care provider contract states :This is a legal contract to provide regular care. A lump sum is paid for a lifetime of care.

He said the money would be in my name, and would earn an interest rate of approximately 4%, which seems suspicious. I asked him how he got paid and he said that nothing comes from us, but compensation comes from the financial institutions they use. He said in the event of her passing the funds would go to heirs. He said if I withdrew before 59.5 I would need to pay taxes on the interest accrued. I'm not sure why my age is a factor when the money would be used for my mothers needs.

There are medical forms and many other documents that are required, as well as signing a contract to move forward. Does anyone have any experience with this? It seems very complicated. I'm unfamiliar with this process, and don't want to do the wrong thing. Any advice is appreciated.
User avatar
RickBoglehead
Posts: 6643
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Veterans Financial to pre plan for a parent?

Post by RickBoglehead »

It's a financial planning company. No reason to hire a financial planner? Then don't.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.
dbr
Posts: 35903
Joined: Sun Mar 04, 2007 9:50 am

Re: Veterans Financial to pre plan for a parent?

Post by dbr »

This appears to be a "service" the result of which is to sell you a deferred annuity, which is a lucrative product for them and of dubious, meaning no, benefit for you.

To end up "qualified" for Medicaid nursing support can be a less than optimum fate for an elderly person. For you to take away all her money and leave her with that is not necessarily what you want, especially not if the motivation is for an insurance company to sell you something.

The Aid and Attendance Benefit is real, but you should understand this benefit from an unbiased source such as a VA financial counselor rather than from a self-interested party who is motivated to take money from you to get a benefit she is entitled to for free. You should also be sure to understand what other military pension and VA benefits might exist by working directly with the VA. Note that in many respects VA and Medicaid are an either or that you have to understand. I have a family member who is supported on Medicaid elderly waiver (learn what this means in your state) who could also as a Vietnam Era Vet have elected VA support instead. I am a Vietnam Era Vet and glad I am fortunate enough that I expect not to need public assistance or VA services. There are certainly enough people out there who need and deserve that support.

As far as Medicaid benefits for indigent and low income elderly, you can learn more by talking to your local county benefits office or even to a financial counselor at a care facility.

The whole topic of giving away assets and then relying on public assistance is a can or worms, but I will leave that can unopened at this point.
Rex66
Posts: 689
Joined: Tue Aug 04, 2020 5:13 pm

Re: Veterans Financial to pre plan for a parent?

Post by Rex66 »

They just want to sell you an annuity

Run
dbr
Posts: 35903
Joined: Sun Mar 04, 2007 9:50 am

Re: Veterans Financial to pre plan for a parent?

Post by dbr »

I should add that in general there is no area of public benefits that you have to pay someone or sign up for a product to get. Information and counseling is available free from the source, or a person can do research online and in books.

Almost all solicitations that are about government programs are simply entry points for someone to sell something, whether it be a Medicaid plan or some other sort of insurance.
Topic Author
sunny skies
Posts: 44
Joined: Wed Oct 03, 2018 6:10 pm

Re: Veterans Financial to pre plan for a parent?

Post by sunny skies »

Thank you for all of your input and advice.

I was suspicious about them putting the money in an annuity, and I know most Bogleheads would not purchase those.

I suppose I could have her apply for aid and assistance directly by filling out the form and sending it to the VA, and not even use this company.

What about the medicaid nursing home eligibility in 5 years by being in the annuities. Does anyone think this is the way to go, being that the other option is to erode all of her savings ? I'm wondering if I should just go with it and pay the fees to end up with at least some money in the end. Does anyone have any experience or advice on that?
BarbBrooklyn
Posts: 981
Joined: Fri Aug 24, 2018 9:33 am
Location: NYC

Re: Veterans Financial to pre plan for a parent?

Post by BarbBrooklyn »

If you are interested in getting your mom qualified for Medicaid down the road, go to an eldercare attorney who understands Medicaid law in MOM'S state.

Medicaid regs are very state specific and change frequently.

Personally, we thought of Medicaid as being the backstop funding in case mom exhausted her funds.

Spending her money to private pay for several years of NH care would have allowed her to stay in her same facility, in her same room. We never thought of those funds as being used for anything else.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
dbr
Posts: 35903
Joined: Sun Mar 04, 2007 9:50 am

Re: Veterans Financial to pre plan for a parent?

Post by dbr »

BarbBrooklyn wrote: Wed Jun 09, 2021 7:43 pm If you are interested in getting your mom qualified for Medicaid down the road, go to an eldercare attorney who understands Medicaid law in MOM'S state.

Medicaid regs are very state specific and change frequently.

Personally, we thought of Medicaid as being the backstop funding in case mom exhausted her funds.

Spending her money to private pay for several years of NH care would have allowed her to stay in her same facility, in her same room. We never thought of those funds as being used for anything else.
I can only underline this about 99 times. Look ahead and understand everything.

Investigate care facilities to determine options starting with private pay and then shifting to Medicaid when funds are exhausted. Different facilities have different policies and everything is state dependent.
rotorhead
Posts: 540
Joined: Wed Mar 17, 2010 3:59 pm
Location: Florida

Re: Veterans Financial to pre plan for a parent?

Post by rotorhead »

OP, there was a thread re Veterans benefits several years ago, which contained some comments relevant to your question here. Here is link: viewtopic.php?f=2&t=210772

My comments at the time are next to last posting. I don't have any relevant, current information; but imagine that not a lot has changed.

Contact the VA directly is best.
Topic Author
sunny skies
Posts: 44
Joined: Wed Oct 03, 2018 6:10 pm

Re: Veterans Financial to pre plan for a parent?

Post by sunny skies »

Thank you everyone for your suggestions and links. Very much appreciated!
Post Reply