Pension Poaching: The Latest Threat to Veterans’ Financial Security
By Consumers Union on Thursday, April 17th, 2014
by guest blogger Shawna Reeves
How low can scammers go? Unscrupulous life insurance agents, financial planners, and attorneys are promising to qualify senior and disabled veterans for a means-tested Veterans Administration benefit called Aid and Attendance. (For examples, see here and here.) Veterans are coaxed into locking up their hard-earned savings and assets into deferred annuities and irrevocable trusts so that they can qualify for the benefit by looking impoverished on paper. This dangerous financial move may prevent the veterans from accessing funds for their immediate healthcare needs or from qualifying for Medicaid. It can also lock up money that could be used for home repair, food, clothing, or other daily necessities. We’d say that’s pretty low.
What is Veterans Aid and Attendance?
The Aid and Attendance program is a lifeline for financially struggling veterans and surviving spouses of veterans with high care needs. Those who qualify for the benefit may be homebound or require daily help with bathing, toileting, feeding, or dressing. Aid and Attendance dollars can be used to pay for care in the home, at a nursing home, or in an assisted living facility. For more information on the benefit, see these FAQs from the VA and California Advocates for Nursing Home Reform.
What is “Pension Poaching”?
The application process for the VA’s Aid and Attendance program can seem complicated to consumers. Pension poachers exploit this worry by promising to help veterans qualify for the benefit, when their real goal is to gain access to the veterans’ personal financial information. Exploiting loopholes in the VA’s rules, pension poachers have unearthed a golden sales opportunity to peddle expensive financial and legal products. Sadly, veterans who follow their advice face staggering fees if they need to break those high-commission annuity contracts or unwind those expensive trusts.
What can I do to protect myself or my loved ones?
Just because a person claims to be an expert in veterans’ benefits, elder law or financial planning, don’t expect them to act in your best interest. Even if they are accredited by the VA – remain skeptical. Also understand that financial predators target places where seniors congregate, such as assisted living facilities, senior centers, churches and Legion Halls. Seniors should exercise extreme caution around anyone posing as a VA benefits advocate, volunteer or educator. Here’s a tip: Veterans can get free help preparing VA pension paperwork through their local Veterans Services Organization. For more details, see this advice from the Federal Trade Commission (FTC).
Have you been a victim?
Seek legal help and be sure to file a complaint with your state’s attorney general (you can click here and on the lower left side is an interactive map that you can click to find your AG’s office), and with the FTC. If you think your lawyer and/or insurance agent acted unethically, also file a complaint with your state’s insurance regulator and with the state bar association. Also, please share your story with us here.