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


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