Beware of "Veterans Annuities"

Beware of "Veterans Annuities"

There's never a shortage of "financial advisors" willing to fleece seniors. That's heinous enough. What gets my blood boiling even faster is when veterans and their surviving spouses are targeted. Our veterans protected us, and now they need our protection.  And since the best protection against these scams is information, here's the lowdown:

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 patritoc images.

They tell a veteran that if his 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 otherise qualified veteran or widow to achieve instant eligibility for benefits to help cover the cost of home care, assisted living or a nursing home.

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.

Attorney Joseph S. Karp is a Florida Bar Certified and Nationally Certified Elder Law Attorney focusing on Elder Law, Probate, Estate Planning, Asset Protection, Special Needs Planning and Estate Litigation. He is AV rated by Martindale Hubbell. Mr. Karp is the founder of The Karp Law Firm, a South Florida law firm with offices in Palm Beach Gardens, Boynton Beach and St. Lucie, Florida.  Mr. Karp was named a 2011 SuperLawyer by SuperLawyer Magazine and a member of the 2011 Florida Legal Elite by Florida Trend Magazine. He is admitted to practice law in New York as well as Florida. Visit Mr. Karp's Florida Elder Law and Estate Planning website. 

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