Targeting Veterans & Their Pensions

The Federal Trade Commission has warned that Veterans and their families are a target for some dishonest advisers who are claiming to offer free help with paperwork for pension claims. The scheme involves attorneys, financial planners, and insurance agents trying to persuade veterans over 65 to make decisions about their pensions without giving them the whole truth about the long-term consequences.

Specifically, these unscrupulous brokers try to convince veterans to transfer their assets to a trust ­ or to invest in insurance products ­ so they can qualify for Aid and Attendance benefits. What they don’t reveal is that these transactions could mean that the veteran loses eligibility for Medicaid services or loses the use of their money for a long time. Adding insult to injury, the advisers are charging fees that range from hundreds to thousands of dollars for their services.
Your best defense against someone who wants to poach your pension to get you a better deal? A firm “no, thanks.”

How These Scammers Operate

The people behind these pitches, who may claim to be veterans’ advocates or even veterans themselves to gain your trust, also show up at assisted living facilities, senior centers, or other places in your community to help you submit your application for A&A benefits to the Department of Veterans Affairs (VA). But often, they’re unscrupulous lawyers, financial planners, or insurance agents who merely rent the space to deliver a lunch or some snacks along with a high-pressure sales pitch for their products and services. These so-called advisers will appeal to your emotions to create anxiety and apprehension about your future. As a rule, they leave out important details; the truth is that if you follow their advice, you’re likely to end up without the supplemental pension benefits they promise, disqualified from other government benefits, and stuck in a financial investment that’s not in your ­ or your family’s ­ best interest for the long term.

The offers almost always involve the Enhanced Pension with Aid and Attendance (also called A&A), which supplements a military pension but is only available in limited circumstances. The qualifications for A&A are specific and strict: You must be over 65; be eligible for a military pension; fall under an income threshold; and need help with daily living tasks (bathing, feeding, dressing, and toileting), be incapacitated physically or mentally, have severely limited eyesight, or be confined to bed or in a nursing home. A&A is never granted automatically either to veterans of a certain age or those with particular disabilities.

The so-called advisers offer to help you complete the paperwork to file your benefits claims. If your assets are above the required threshold, their goal is to convince you to restructure your finances so you can qualify for A&A. That’s how they earn their money: by selling you an annuity or creating a trust. For instance, the more money you put into certain insurance products, the more money the insurance adviser gets paid.

Be Wary!

•    Know what’s in a name. The words “veterans” or “military families” in an organization’s name don’t necessarily mean that the group represents the best interests of veterans or their families. Some so-called advisers are dishonest and mislead veterans and their families to believe that they are veterans’ advocates representing a nonprofit or that they’re endorsed by VA.

•    Respond with a fast no — or take plenty of time to get to yes. Check out an organization before you give it any money or do business with it in any way. Some deceptive advisers use names, seals, and logos that look or sound like those of respected, legitimate organizations. You may see a small difference in the name of the organization from the one you mean to deal with: that’s your signal to call the organization you know to be legitimate and ask it a lot of questions.

•    If being pressured, say “no” —  If you decide to attend a presentation about veterans’ benefits, don’t spend any money until you’ve had time to think about the options, and play out as many potential scenarios as you can imagine. If the salesperson is giving you vague or evasive answers, walk away. This is not a person you want to trust with your money, your benefits, or your future.

•    It’s your decision how to spend your money — Read all the papers and the contract carefully. Understand all the terms, conditions, and implications of what you are being asked to do. Get everything you discussed in writing. If something isn’t clear to you, ask for an explanation in writing. Take your time to review and consider all your options, including doing nothing. Discuss the possibilities with a trusted friend or family member. For instance, before an annuity contract is final, you get a “free look” period. How long the period lasts depends on state law. This is your chance to decide you don’t want the annuity, return the contract, and get your money back.

•    There are no Guarantees — If an adviser guarantees or promises that they can help you get A&A benefits, forget about it. No one can promise that the VA will award you a benefit – even someone who claims to be VA-approved or accredited. Only the VA can do that.