Florida Elder Law & Estate Planning Blog


Beware of “Veterans Annuities”

September 17, 2011

There’s never a shortage of “financial advisors” willing to fleece seniors. That’s heinous enough. More outrageous still is when veterans and their surviving spouses are the targets. Our veterans protected us, and now they need our protection.  And since the best protection against these scams is information, here’s the lowdown on “Veterans Benefits Experts.”

*Update: Effective Oct. 18, 2018, the V.A. has a 36-month look-back period.

What To Watch For

So-called Veterans Benefits Experts advertise in newspapers, often offering free seminars or no-charge meetings with veterans and surviving spouses. They represent companies whose names are loaded with patriotic buzzwords.  They often distribute slick brochures adorned with patriotic images.

They tell a veteran that if his/her assets exceed the level necessary to obtain Aid and Attendance benefits, the veterans should just plow those excess benefits into an annuity. Since the Department of Veterans Affairs does not look back at asset transfers, the annuity will allow an otherwise qualified veteran or widow to achieve instant eligibility for benefits to help cover the cost of home care, assisted living or a nursing home.

The Catch

Of course, there is a catch. Two, actually.

  • First, tying up money in an annuity is almost never a good idea for an elderly person. If it’s ever needed, you’ll face huge penalties when you try to withdraw your money.

 

  • Second, people need more intensive help as they age, not less. So if you’re a veteran or surviving spouse in need of Aid and Attendance benefits, somewhere down the line you may want to apply for Medicaid benefits for long-term care to help you with your more extensive needs. In Florida, if the veteran or anyone purchases an annuity and then has to apply for Medicaid for long-term care, the state of Florida MUST be designated as a beneficiary of that annuity for Medicaid expenses. That’s the part that the annuity salesman won’t tell you, or if we want to give the benefit of the doubt, perhaps just doesn’t know about.

 

One thing the salesman surely does know about is this: Selling you a “Veterans annuity” will provide him with a handsome commission. And now you know it, too.

If you are a veteran or a veteran’s surviving spouse and need help, DO NOT purchase an annuity without consulting with a Florida Bar Certified Elder Law Attorney who is also accredited by the V.A. to give benefits advice. Your attorney will help you fully understand the pros and the cons  and explain alternatives  to buying an annuity. All the attorneys of The Karp Law Firm are V.A. accredited.

More information on Veterans benefits for long-term care.