VA Benefits and the Transfer of Assets to an Irrevocable Trust

Web Admin - Friday, November 27, 2015

VA benefits and irrevocable trust, Illinois employment lawThe Department of Veterans Affairs (VA) provides our nation’s veterans with important benefits after they have been discharged from service. In order to qualify for those benefits, veterans must meet certain requirements. For some veterans, it may be necessary to transfer assets into an irrevocable trust to lower his or her net worth. 

Qualifying for Pension 

The Veterans Pension benefit is a tax-free, monetary benefit for low-income veterans. In order to qualify, the following requirements must be met: 

1. Veteran must be 65 years of age or older or permanently and totally disabled;

2. He or he must have been discharged under conditions other than dishonorable;

3. He or she must have served, which generally involves a minimum period of active duty service, one day of which was during wartime;

4. Net worth must not be considered too substantial; and

5. Countable family income must be below the yearly limit as set by law. 

Veterans who are concerned about their level of net worth may consider forming an irrevocable trust. By creating an irrevocable trust, net worth can be reduced in order to qualify for the Veterans Pension. The VA does not assess a penalty for transferring assets as long as that transfer occurs prior to filing a claim or notifying the VA of an intent to file a claim. The determination of net worth is subjective—the VA has discretion in determining whether a veteran’s assets are too large to qualify for the Veterans Pension. 

An irrevocable trust can be used to hold assets that are provided by a veteran in order to reduce net worth. Importantly, a veteran claiming benefits (as well as his or her spouse) cannot be an income or principal beneficiary of the trust established in order to obtain VA benefits. This is because the VA requires that the rights to property and income from that property be actually relinquished to be considered a reduction of net worth. 

A second issue relates to whether to form the trust as a grantor trust or a non-grantor trust. The VA compares income reported to it with Supplemental Security Income (SSI) and Internal Revenue Service (IRS) income records through a process called Income Verification Match (IVM). Due to the nature of a grantor trust, there may be a discrepancy between income reported to the VA and income that appears with IRS filings. 

Under a grantor trust, all items within the trust are taxed to the grantor on his or her personal income tax return. Ordinarily, the grantor is the person who funds the trust, which, in this case, is the veteran claiming benefits. The VA may assume that the tax reported on the veteran’s tax return is based on income of the veteran, which may lead to lower (or complete denial of) benefits. Therefore, a non-grantor trust, in which the trust is responsible for any tax, is likely more desirable, in an attempt to avoid this potential issue. 

Forming a Trust 

If you would like more information on the formation of a trust, reach out to a skilled Illinois estate planning attorney today. Our firm proudly helps individuals in the communities of Inverness, Schaumburg, Palatine, Arlington Heights, Kenilworth, Long Grove, Riverwoods, Barrington, South Barrington, and Mount Prospect. We look forward to hearing from you. 

About the Author:

Attorney Jay Andrew is a founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/ commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.


Recent Posts


Schaumburg corporate attorney car crash injuries rest breaks pay when paid contract Palatine law firm Super Mario insurance claims employment law, Illinois employment laws commercial leasing car crash Illinois wills and trusts boating accidents income distribution deducation Schaumburg Schaumburg injury lawyer Buffalo Grove injury lawyer ken apicella Rolling Meadows insurance dispute lawyers, insurance dispute drug possession Federal Food Drug and Cosmetic Act reckless homicide wills and trusts Arlington Heights car crash attorneys Arlington Heights trucking lawyer Chicago corporate attorney Illinois criminal defense attorney product liability internet agent deadly crashes Food and Drug Administration's Food Safety Modernization Act Arlington Heights injury attorney Arlington Heights traffic attorney Rolling Meadows employment law attorneys Riverwoods estate planning lawyer Long Grove estate planning attorneys Schaumburg employment attorney Rolling Meadows criminal lawyer Illinois civil litigation lawyer DUI defense Barrington estate planning lawyer Palatine corporate law attorneys real estate zoning Illinois personal injury Palatine criminal defense lawyer motorcycle accident lawyer living trust vs will Barrington employment law attorney Exclusions Illinois boating accident lawyer real estate insurance claim Schaumburg estate attorney Rolling Meadows Traffic Lawyer ACA products liability operating agreements rollover car crashes Kenilworth estate planning attorney caregiver natural gas Illinois living will tax attorney liability Palatine employment lawyer DMV Arlington Heights criminal lawyer disability benefits Legal Info Des Plaines Traffic Lawyer Illinois business lawyer construction accidents field sobriety test Palatine trusts lawyer Chicago insurance law firm Forcible Entry Deer Park criminal attorney Des Plaines claims law firm distracted driving accident victims Illinois lawyer mortgage Rolling Meadows litigation lawyer contracts criminal defense Illinois employment law attorneys food poisoning Arlington Heights estate planning attorney motorcycle accident Rolling Meadows employment attorney eluding a police officer Schaumburg employment law attorneys Arlington Heights real estate lawyer elder abuse elder law Illinois car accident attorney new real estate form Arlington Heights pedestrian accidents small business distracted driving accidents Buffalo Grove insurance claim dispute lawyers Inverness injury lawyer underage DUI Inverness insurance attorney TBI POA head on collisions sexual harassment car collision estate planning lawyer drunk driving statistics Rolling Meadows employment law attorney Illinois medical malpractice claim insurance agents probate fees car accidents Long Grove estate planning attorney traumatic brain injury llinois Real Estate Lawyers Association Palatine probate lawyer guardianship attorney murder charges right to work unpaid overtime digital evidence Inverness traffic law firm Crystal Lake pet attorney insurance denial appeals Long Grove real estate lawyer Crystal Lake injury attorney digital assets Palatine workers compensation lawyer Illinois jet ski accident lawyer Buffalo Grove medical malpractice lawyers Palatine employment law lawyer Arlington Heights wills and trusts lawyers Illinois red light cameras BAIID no contest clauses Illinois medical malpractice attorney employment contract employment law forming a corporation in Illinois Rolling Meadows personal injury lawyer Inverness DUI lawyer changes to mortgage law murder spinal cord injuries insurance attorney Illinois job attorney condo association speeding independent contractor Buffalo Grove personal injury attorney insurance dispute Crystal Lake personal injury lawyer Arlington Heights personal injury lawyer personal injury Illinois Probate Act of 1975 insurance denials Retaliatory Discharge Crystal Lake pedestrian accident lawyer Class A misdemeanor DUI Illinois bicycle safety Chicago car accident lawyer Illinois trusts attorney Buffalo Grove law firm driving Illinois probate lawyer Rolling Meadows drug defense attorney surgical mistakes Palatine punch death digital media accounts, estate planning, Arlington Heights estate planning attorney, Illinois estate planning law firm unfunded trust in terrorem provision civil litigation attorney estate planning for college students Barrington criminal defense lawyer Illinois traffic attorney Illinois Human Rights Act Barrington boating accident attorney dynasty trusts fiduciary rule Deer Park traffic accident attorney traffic violations license reinstatement Illinois wrongful termination lawyer employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys Schaumburg estate planning lawyer employee misclassification icy parking lots Inverness probate lawyer Chicago trucking accident attorney Des Plaines medical malpractice attorney texting while driving cell phone Arlington Heights employment law attorneys pregnant women Illinois attorney hit and run accident denied insurance claim consent to a search Mt Prospect Attorney Illinois insurance disputes estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, wrongful termination insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys Mount Prospect elder law attorney Buffalo Grove traffic attorney Illinois law Buffalo Grove personal injury lawyer Des Plaines accident attorney bike accident privacy laws insurance claim dispute attorney Illinois home inspection marijuana IRS attorney fees Schaumburg real estate lawyer taxes Illinois construction accident attorney pedestrian-automobile accident boating under the influence construction contracts bad faith insurance claims minimum wage Palatine construction attorney trustee Des Plaines motorcycle accident attorney Rolling Meadows business lawyer cell phone tower data nursing home negligence medical malpractice claims involuntary manslaughter Landlord Tenant Ordinance college kids Illinois Sales Representative Act IRA trust transfer texting and driving spinal cord injury pet law workers comp Illinois corporate lawyer Illinois small business trucking accident lawyers traffic violations defense Barrington Traffic Lawyer Illinois rollover accident lawyers Barrington personal injury lawyer institutional trustee Inverness civil lawyer civil litigation Illinois personal injury lawyers Illinois workers compensation lawyer Palatine traffic accidents Illinois estate planning attorney estate planning trusts living wills federal regulations for LLCs Schaumburg probate attorney Rolling Meadows medical malpractice lawyers Illinois will lawyer Illinois defective products attorney problem employees Buffalo Grove real estate attorney Schaumburg criminal attorney Illinois collections attorney Colin H. Gilbert Des Plaines personal injury attorney Deer Park motorcycle accident lawyer Des Plaines pet law attorney Illinois driving without license traffic accidents Chicago will attorney estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers Illinois Wage Payment and Collection Act personal injury attorney Illinois workplace discrimination attorney digital information Crystal Lake employment law attorney insurance negligence Palatine injury attorney Des Plaines DUI attorney preventable medical errors BAC Barrington employment law firm Rolling Meadows probate lawyer criminal law Illinois Mount Prospect wills and trusts lawyers Chicago biking tips Arlington Heights accident attorney unauthorized overtime sole proprietorship probate Crystal Lake estate planning lawyer probate claims Illinois workplace lawyer trucking accidents Illinois personal injury attorney denied insurance claims Employment Discrimination Law Palatine civil attorney IRELA personal injury claim Crystal Lake employment attorney pet bites Palatine insurance lawyer liability claims subcontractor Rolling Meadows real estate attorney Schaumburg drug defense lawyer Crystal Lake car accident attorney Crystal Lake law firm Illinois employment laws Chicago employment lawyer Des Plaines personal injury lawyers Barrington estate planning attorney wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys traffic laws Home Remodeling Repair Act anesthesia errors Des Plaines real estate attorney child safety South Barrington real estate lawyer trench injuries personal injury accidents estate attorney privacy medical research Illinois estate planning whistleblower protections startup company Deer Park accident attorney Crystal Lake will lawyer rollover accidents jet ski power of attorney for healthcare Inverness personal injury attorney Rolling Meadows criminal attorney fatal car accidents manufacturing insurance disputes Rolling Meadows car accident lawyers medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers wrongful death Des Plaines personal injury lawyer Illinois insurance dispute lawyers Schaumburg personal injury lawyers fiduciary rule delay Des Plaines insurance attorney Chicago employment attorney Barrington employment attorney Deer Park traffic lawyer Illinois employment law attorney corporate law Illinois employee rights attorney. Liquor Control Act jet ski accidents Affordable Care Act Barrington injury attorney Illinois insurance claim dispute lawyers Illinois elder law attorney Crystal Lake traffic attorney real estate attorneys FMLA Chicago lawyer meal breaks construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Policy Cancellation fault based insurance Illinois employment law life insurance insurance agent negligence car accident lawyers Crystal Lake civil litigation lawyer Rolling Meadows marijuana attorney real estate attorney employees pain and suffering uninsured motorist Des Plaines injury law firm Colin Gilbert living trust benefits auto accidents comparative negligence landlord Deer Park employment law attorney Arlington Heights employment attorney Schaumburg car accident attorney Arlington Heights Traffic Lawyer Crystal Lake tax lawyer medication errors Inverness elder law lawyer traffic offenses Crystal Lake business law attorneys Illinois Transfer on Death Instrument insurance claim delay South Barrington real estate attorney Inverness real estate lawyer Illinois motorcycle accident lawyer Illinois LLC creation Rolling Meadows estate planning attorney Self-Directed IRA Accounts Illinois insurance claim dispute lawyer drug crime suspended license Chicago estate planning traumatic brain injuries DNR Arlington Heights wills and trusts lawyer modern family estate planning life insurance policy Illinois insurance lawyer Illinois medical malpractice lawyers drugs underfunded trust Palatine employment attorney life insurance lawyer Schaumburg estate planning attorney preventing accidents insurance claim denial wage theft Thanksgiving swimming pools Crystal Lake personal injury attorney workers compensation benefits clemency pizza emoji Schaumburg civil litigation attorney Des Plaines collections attorney Crystal Lake bike accident lawyer holiday statistics license Illinois insurance claims lawyers advance healthcare directive senior citizens healthcare loopholes slip and fall accidents landlord tenant law Rolling Meadows tax attorney Inverness accident lawyer Deer Park DUI lawyer severance agreements real estate leasing Palatine business attorney Rolling Meadows personal injury claims mass shooting wills Des Plaines drug lawyer Barrington litigation attorney cell phone accidents IRA benefits Inverness corporate attorney Deer Park real estate law firm Crystal lake insurance dispute attorney medical malpractice compensation Palatine corporate attorney probate lawyer Illinois DUI attorney bicycle accidents Inverness real estate attorney investment property Arlington Heights personal injury attorney Inverness estate planning lawyer estate plan defective products lawyer car accident lawyer Arlington Heights tax lawyer Palatine drug lawyer home inspection lawyer Rolling Meadows insurance dispute lawyers Illinois speeding lawyer real estate closing Illinois employment attorneys Schaumburg insurance lawyers Kenilworth estate planning attorneys estate planning attorney Rolling Meadows boating crash lawyer filing a medical malpractice claim Rolling Meadows traffic law firm Buffalo Grove probate lawyer federal crimes employment attorney paid sick leave DUI penalities employee rights employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, Arlington Heights Attorney compensatory time Crystal Lake medical malpractice lawyer CAM Arlington Heights TBI attorney Barrington civil litigation attorney license revocation Schaumburg traffic lawyer pedestrian accidents Crystal Lake accident attorney Rolling Meadows insurance lawyer Jay Andrew gift taxes DUI attorney Rolling Meadows accident lawyer Buffalo Grove corporate attorney social media after death Illinois real estate drunk driving Fair Labor Standards Act Illinois employment law firm life insurance claims Long Grove real estate attorney Illinois traffic ticket lawyer work unions Schaumburg wrongful death attorney Schaumburg construction accident lawyer appealing an insurance claim revenge porn living trust vacation home gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys Barrington criminal lawyer trusts Illinois personal injury lawyer Buffalo Grove traffic lawyers traffic tickets Illinois business law atorneys Schaumburg medical malpractice lawyer ObamaCare Barrington attorney Palatine traffic lawyer boating DUI Palatine civil litigation lawyer Crystal Lake medical malpractice attorneys workers compensation Schaumburg Attorney job lawyers golf accidents Schaumburg elder law lawyer Schaumburg personal injury lawyer low-ball insurance settlement back injuries Illinois traffic accident lawyer condo FSLA personal injury lawyer Barrington Illinois estate planning lawyer Buffalo Grove criminal defense lawyer vacation home fines Des Plaines real estate lawyer insurance claim dispute Rolling Meadows personal injury lawyers Barrington business law firm Crystal Lake traffic lawyer insurance claim denials Des Plaines Barrington real estate lawyer Crystal Lake car accident lawyer estate planning breach of contract Des Plaines drug crimes lawyer real estate lawyer Crystal Lake insurance lawyer Illinois insurance claim attorney commercial leases car accident hands free device Illinois employment lawyer Chicago traffic lawyer first degree murder employee discrimination blood alcohol content drug crimes LLCs truck collisions automated cars comp time Barrington personal injury attorney Illinois mortgages Palatine elder law attorney GM ignition switches rent to own real estate contracts installment contracts Rolling Meadows traffic attorney civil rights violation commercial real estate car crashes Illinois medical malpractice case Family Medical Leave Act underinsured motorist BUI Chicago estate planning lawyer insurance adjusters Illinois pet lawyer Palatine Attorney bicycle dooring accidents Attorney Ken Apicella Home Sale Contingencies license suspension trauma after an accident marijuana crimes attorney Arlington Heights car accident lawyer Des Plaines tax law firm capital gains tax defective products deed transfer foreclosed rental property blended families rumble strips irrevocable trust digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers Schaumburg personal injury attorney Mount Prospect real estate lawyer workplace sexual harassment creditors pedestrian accident denial of life insurance DGAA liens foreclosure Illinois real estate lawyer expungement healthcare claims Arlington Heights insurance attorney dog bites Illinois Workers’ Compensation Commission Whistleblower Claims brain injury Arlington Heights wills and trusts attorneys Des Plaines criminal attorney Illinois pedestrian accident attorney real estate contract sexual images Illinois Smoke Detector Act residential real estate power of attorney Barrington workers compensation attorney homestead rights financial advisors Do Not Resuscitate Illinois traffic laws Deer Park personal injury lawyer Crystal Lake medical malpractice law firm Des Plaines civil attorney Rolling Meadows insurance attorney criminal Long Grove wills and trusts attorneys accidental death benefits owner responsibility overtime pay Chicago insurance claim attorneys Illinois injury lawyer dram shop law slip and fall controlled substance Arlington Heights lawyer caretaker rights Kenilworth estate planning lawyer Illinois traffic attorneys Buffalo Grove car accident lawyer Deer Park medical malpractice attorney Barrington drug crime attorney drug crimes lawyer medical marijuana breathalyzer test Detainer Actions business litigation Rolling Meadows corporate lawyer premises liability insurance dispute attorney Chicago attorney Schaumburg criminal law attorney School Visitation Rights Act Palatine estate planning lawyer Rolling Meadows Attorney personal injury law firm Illinois registered agent natural gas explosion trust payments traffic crimes health insurance dispute probate process Chicago will attorney, social media platforms, Illinois estate planning lawyer, Rolling Meadows personal injury attorney hiring employees Rolling Meadows DUI lawyer Long Grove estate planning Illinois tax attorney Illinois wills and trusts attorneys probate claims process Palatine personal injury lawyer unpaid assessment Fourth of July Arlington Heights wills and trusts attorney Crystal Lake criminal defense attorney criminal record Arlington Heights medical malpractice lawyer medical malpractice Palatine real estate lawyer special needs trust Transfer on Death Instrument loss of consortium Deer Park workers compensation lawyer Buffalo Grove employment lawyer Illinois insurance attorney PTSD dealing with problem employees estate tax murder defense employment lawyer overtime violations traffic deaths Illinois workers compensation attorney Crystal Lake employment lawyer Illinois trucking safety pedestrian injuries, pedestrian fatality Joliet general practice lawyers crossover accidents Barrington medical malpractice lawyers