The leading provider of practice management solutions to maximize opportunity and joy for Estate Planning attorneys
The leading provider of practice management solutions to maximize opportunity and joy for Estate Planning attorneys
Document drafting is the backbone of estate planning, translating your clients’ wishes into legally sound instruments that ensure their intentions are carried out to the letter.
Whether you’re meticulously crafting each document by hand or leveraging the efficiency of automated software, the stakes are high—errors can lead to unintended consequences that may jeopardize an entire estate plan.
At Lawyers With Purpose, we are committed to continuously improving our offerings based on member feedback and legal developments. Our new LWP STEPS™ platform represents a significant advancement in estate planning technology, designed to help our members stay ahead in a competitive field. Don’t miss out on the benefits of early adoption—sign up today and take your practice to the next level.
By automating and centralizing many of the administrative tasks involved in legal practice, law practice management software (also known as case management software) helps law firms of all sizes streamline their workflows, reduce costs, and enhance client satisfaction.
As a lawyer practicing in the elder law and estate planning industry for 25 years, I'm always intrigued by what lawyers refer to as remarriage protections. Remarriage protection relates to the provisions that one puts in a trust to ensure after a spouse dies and a surviving spouse remarries (or cohabitates) that the underlying estate plan of the deceased spouse is honored and maintained. The truth is that trust systems in the estate planning industry have little, if any, remarriage language or protections. The general protection that trust systems provide for remarriage is that if a spouse remarries, they allow you to discontinue payments of interest or principal to that spouse, and that's usually limited to the context in a family or marital trust. Wow, that's remarriage protection?
Hardly. In the Lawyers with Purpose Client Centered Software (LWP-CCS) system, there are layers of remarriage protections available to the client. First and foremost, the trust system tracks all of the benefits granted to a surviving spouse as you design the plan and import data into the trust system. Second, the trust system tracks all of the authority that you give a surviving spouse as trustee, trust protector, etc. Third, the LWP-CCS system allows you to identify what your client considers to be “remarriage.” In our default definition, the language identifies that a spouse will be deemed to be remarried after cohabiting for one night. The software also allows you to customize your own definition of remarriage, and once that definition is triggered you are then allowed to customize which of the powers or benefits that you have granted a surviving spouse will be modified or eliminated, along with any conditions for reinstatement.
For example, if a surviving spouse has been named trustee, the software knows that and asks you if you want to remove the right of the surviving spouse to be trustee upon marriage. Secondly, the trust software tracks all beneficial interests of the surviving spouse, and if you elect to have remarriage restrictions, the software will show you all the different places where the surviving spouse has retained a right to benefit from the trust. It will also ask if you want to minimize or eliminate any of those benefits individually, not collectively. That is, you can pick and choose which ones stay and which ones go.
Does this seem too good to be true? Well, it is if you have regular software, but the LWP-CCS software has been designed around the needs of the client, not the lawyers. The good news is, once you identify the needs of the client, the software will put in the necessary legal language to accomplish the objectives that you have identified for the clients. This is what being a Lawyer with Purpose means, and this is what client-centered software is all about. Don't go it alone. Let Lawyers with Purpose show you how to do real remarriage protection planning for clients.
If you aren't a Lawyers With Purpose member and are even thinking about adding estate or elder law to your existing practice, or want to make your estate/elder law practice more efficient, join us in the room in Houston this October 24th and 25th. Click here for the full agenda and to discover more of what you'll get from this program!
David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center
Well, here we go again. On July 12, a New Hampshire Trial Court ruled that an irrevocable trust was an available resource. Or did it? A careful examination of the Braiterman case really comes down to three issues. The first was an imaginary stretching of the "any circumstances" provision in Medicaid law. The second was an imaginary stretching of "trustee's powers," and the third, superfluous language added by the attorney that had no legal relevance to the trust document.
I believe, however, that the superfluous language had the greatest impact on this court to find a way to make the trust assets available. The good news is that this case is neither precedent setting not universally applied. Let us take a look at the faulty (weak) holding. The crux of the court’s argument is that, under 42USC1396P(d)(3)(B), "if there are any circumstances under which proceeds from a trust could be made to or for the benefit of the applicant, then the irrevocable trust is deemed available for purposes of determining eligibility for Medicaid." Interestingly, it was clear under the trust terms that there were not any circumstances under which the payment from the trust could be made available to the beneficiary applicant. In fact, the court highlighted that the language specifically said that the trustees cannot make any distributions of income or principal to the grantor.
The court, however, focused on superfluous language in the trust stating that, if at any time during the lifetime of the grantor, the grantor could lose eligibility for benefit because of the existence of this trust, then it was the grantor's “request” that the trustee consider bringing action to terminate the trust and to distribute the trusts corpus to the beneficiaries (again, NOT the grantor). Continuing, the trust stated that the grantor “hoped” that the people who received the trust corpus would use it for her benefit. The superfluous language goes on explicitly to identify the grantor's disability, or need for income. The imaginary stretch by the court here is that, although the attorney added this language that the court hangs on, in fact, there's no legal authority to enforce it. Under most states’ laws, termination of an irrevocable trust requires the consent of not only the trustee, but also of the grantor and the residuary beneficiaries; state law determines whether an irrevocable trust can be terminated, not a trustee. The only authority granted to the trustee in this trust was to bring an action to terminate the trust and distribute it to the beneficiaries.
So there's a double faux pas here; first, there is a presumption that the trustee has the unilateral authority to terminate the trust. Second, there is an enormous leap by the court in deciding that, because the grantor added the language “hoping” for the beneficiaries to use the proceeds for her, that there in fact actually is a legal obligation or even a legal authority to consider it required, so as to make the assets declared available to the grantor. The mistake by the court here is that any access to the trust income or principal is NOT contained within the four corners of the trust, but rather is a stretch to what a beneficiary will choose to do with trust assets after receiving them (which, by the way, is no longer a trust asset!).
The court notes that in her capacity as trustee, the grantor had authority without limitation to "terminate the trust by distributing the principle and accumulating income of the trust fund if in her judgement she might lose eligibility to substantial cash benefits or medical or other services. Again, the court stretches and fills in this imaginary chasm with rationale that indicates that there's actually legal authority for the trustee to do this. In fact, the court alludes that the grantor not being named a trust beneficiary is not dispositive, and held that because there is "any circumstance" that would permit the grantor to get the proceeds, then it was countable. In this fact pattern, the court argued that, since it could be distributed to the children and there was no prohibition on the children to distribute it back to the grantor, the court could infer that there is a circumstance in which the grantor could benefit. This is troubling, as there is no basis, no background and legal support of language anywhere to support this other than the court's opinion.
So what does this case tell us? First and foremost, it affirms what we already know: that a lot of courts do not like Medicaid planning. And that's OK. Second, it tells us attorneys that adding superfluous language that does not relate to the legal provisions of the trust has absolutely no legal impact on the trust terms, but in every contrary case decided up to this point, including Braiterman, it is proven to be the words hung on by the court to disallow planning for people who engage in Medicaid planning. I have been a longtime advocate of Medicaid planning, but more importantly, proper Medicaid planning. When following the rules, individuals who give away their assets are subject to the lookback period and potential imposition of ineligibility based on any uncompensated transfers. The law anticipates this, provides for it, and has clearly stated it. The challenge here is when courts usurp the law and assume information that is not legal or based on legal principles. I fully expect this case to be overturned on appeal, but nonetheless in a state like New Hampshire, a more liberal state, anything is possible.
The good news is the Lawyers with Purpose Client Centered Software (LWP-CCS) system has specific language that would nullify the court's holding in this case. In addition, Lawyers with Purpose attorneys are trained never to add superfluous language that does not relate to the legal terms of the trust. It is when lawyers forget that trusts are legal documents and entities, much like an LLC, that we get cases such as Braiterman. For example, in an LLC operating agreement, would you allow the owners to have rights to pay their medical expenses if they went into a nursing home? Obviously it's silly, but a trust is no different; it's a separate legal entity and should be respected as such. Attorneys must ensure that all of the provisions and terms relate to authority of the trustee to administer the trust and make distributions to the intended beneficiaries, and should in no way ever suggest or provide that trust principal be available or used for the grantor if it is an irrevocable trust intending to exclude its assets from consideration for Medicaid eligibility.
Interestingly, on the same day this case was released, I was notified once again by an LWP member in Florida that the Florida Department of Medicaid upheld a Lawyers with Purpose trust that provided that the grantor was trustee and that all assets in the trust were deemed unavailable. So before we jump off any bridges based on the Braiterman case and give up our Medicaid practices, understand your jurisdictions, understand your job as the attorney and, as we focus on at Lawyers with Purpose, always be an advocate for your client using the law, and keep your superfluous language out of it.
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David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center
I've been working with estate planning attorneys around the United States for almost 20 years, and I am always intrigued about how excited they get when they deliver a presentation, seminar or workshop. The interesting dynamic is how pumped they get in front of a room full of people. It might surprise you to learn that such a situation is not exciting to me or to any LWP attorney, for one simple reason. We have learned that it is not the number of people in the room or your ability to speak to them that matters, but rather your ability to communicate and create relationships with them so they trust you and understand how you can help them accomplish their goals. That’s when they hire you.
Under the Lawyers with Purpose workshop system, our members are provided three different workshops, depending upon which best matches their personal objectives. We offer members the “Estate Planning Essentials” workshop, the “Seven Threats to Every Estate Plan” workshop, and the “How to Protect Your Stuff in Three Easy Steps” workshop. All three teach the same concepts and utilize similar stories, but most importantly, all connect and relate to the Estate Plan Audit™ utilized in the Vision Meeting™ with individuals who attend the workshop and opt for a meeting with you. They also delve into what estate planning is and the specific issues you want them to know (all contained in our trademarked and copyrighted workshops).
Why is this relevant? Because the excitement over the number of people in your workshop is baseless if none of them hire you. If your workshop can't show people how you can help them and explain how your solutions are relevant to them and will benefit them, then stay home with your family rather than waste the time.
So, to avoid that scenario, let’s consider the core elements of a successful workshop. First, ensure in advance that you are clear on who is registered to attend your workshop. You should also ask how each attendee heard about you; that is, what source of marketing got them to call your office (a professional relationship, a retail advertisement, or other). Second, your staff should welcome all attendees during enrollment, excite them about the workshop they're going to attend and touch on how it will offer new ideas to solve their concerns. Third, your team should follow up with attendees ahead of time and confirm attendance. Fourth, during the workshop it is essential to set the expectation up front that you will make commitments to the audience, and to make sure the audience understands that you expect them at the end of the workshop to complete the evaluation and request a meeting if they think it's appropriate. This is perhaps the most important part of the workshop – not all the education you provide, but rather the invitation for them to move forward with you at the conclusion. You must be enthusiastic and excited for them to come in and apply what they learned to their personal situation, in hopes of helping them accomplish their goals and objectives based upon what they’ve learned in the workshop. If you don't believe in yourself, why would they?
And finally, another very important element of every workshop, one in which I have found that most lawyers fail, is to follow up with the attendees to schedule the appointment. I cannot tell you how many times I've worked with attorneys who either neglected to get an evaluation at the end or got the evaluation and failed to follow up on it.
Life is busy. People don't have “free time” to just pop into a workshop, and oh, by the way, I can't wait to go see a lawyer tomorrow to talk about all this crazy stuff. For most people, their lives are busy and complicated, and they're confused. You must be the one who clarifies the confusion and shows them a simple approach for them to get their concerns solved.
That's what the Lawyers with Purpose workshop system does. In fact, we call it the Client Enrollment System™ because it's a complete process, from identifying the client's needs after their initial contact with you, to the point of their engagement with your firm. That's the significance of workshops and seminars: not the excitement of delivering them, but the excitement of actually being able to help people implement great planning solutions that protect them and their family. Contact Lawyers with Purpose today if you want to learn more about what we can bring to your estate and/or elder law practice. Just click here and give us a little information then download our membership brochure.
David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center
The latest version of the Lawyers with Purpose Client-Centered Software (LWP-CCS) was recently released and can be downloaded by using the link emailed to all qualifying members. Instructions on how to install the update are included. Please contact Member Services if you have not received an email. Updates were made to the Medicaid and VA modules and the LWP-CCS forms; the changes are summarized below.
Medicaid Qualification
Statutory wartime dates for VA eligibility have been added to the MedQual Worksheet as a reference aid. Further changes were made to the Asset Risk Analysis to show the rate of loss to a nursing home when in a "crisis" situation. You may also notice that the termination language in the Personal Services Agreement has been simplified per member feedback.
We also updated and simplified the language of the Termination section in the Personal Services Agreement.
LWP-CCS Forms
There have been some state-specific changes to the form documents at the request of our state bar members.
We also updated the Illinois Health Care Power of Attorney.
VA Qualification and Application
As another quarter is coming to a close for 2016 without us hearing a peep regarding the proposed VA look-back period, changes to the VA module were minimal with this release. As done for the MedQual worksheet, wartime dates for VA eligibility were added to the VA HotDocs Interviews for convenient reference.
The most important update was the new version of the main application form for filing for veterans improved pension; namely the VA form 21-527EZ Application For Pension is now the 21P-527EZ. Although this is an important update due to the significance of this form and the need to use VA-prescribed forms, the actual changes were negligible, consisting only of the addition of the letter P to the form number and a new revision date of April 2016. Another VA form that was updated is the 24-0296 Direct Deposit Enrollment, which you may use to enroll in direct deposit of VA payments into a bank account.
Another change was made at a member’s suggestion regarding the healthcare provider statement that is generated either through the VA Intent to File Interview or the VA Formal Claim Interview to document certain medical expenses. This document was generating by default with the veteran’s name in the field, “The following services are provided to: _________.” This latest release has removed this default so that this field now remains blank and this form can be used for the veteran and/or the spouse as needed.
This last change illustrates how Lawyers with Purpose benefits from you, our community of members, in improving and developing our software. We are always open to any ideas that allow us to provide you with the most current, useful, and efficient tools for your firm. Always let us know how we can be better!
If you're a Lawyers With Purpose member and use Actionstep, the corresponding software release and separate instruction file is available for download now in the Software section of the members’ Lawyers with Purpose website at http://www.lwpmembers.com/posts/lwp-actionstep-hotdocs-integration. The changes in the Actionstep release are identical to those listed above.
If you want to learn more about our drafting software click here to schedule a live demo.
By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Director of VA Services for Lawyers with Purpose.
Victoria L. Collier, Veteran of the United States Air Force, 1989-1995 and United States Army Reserves, 2001-2004. Victoria is a Certified Elder Law Attorney through the National Elder Law Foundation; Author of “47 Secret Veterans Benefits for Seniors”; Author of “Paying for Long Term Care: Financial Help for Wartime Veterans: The VA Aid & Attendance Benefit”; Founder of The Elder & Disability Law Firm of Victoria L. Collier, PC; Co-Founder of Lawyers with Purpose; and Co-Founder of Veterans Advocate Group of America.
As many of us are aware, the federal guidelines allow Medicaid applicants to transfer their home to a child caregiver without suffering a Medicaid penalty for the transfer. It is a transfer often attempted by families in the Medicaid application process. It is also a transfer that often fails to meet the requirements necessary for the Medicaid agency to acknowledge the transfer under the child caregiver exemption.
The federal guidelines for the transfer remain somewhat vague, declaring that each state must develop “reasonable standards … for determining eligibility for and the extent of medical assistance,” and that the individual must “fulfill the criteria established by the State in which he lives.” 42 USCA 1396a(a)(17)(A), 453 US 34. This makes it of critical importance that we look to our individual state laws for the specific guidelines necessary. It is also crucial that our clients provide the documentation necessary to prove they acted properly as a caregiver for the parent for at least two consecutive years prior to the transfer.
Generally, individual states require that the child caregiver has resided in the parent’s home for at least two consecutive years immediately preceding the institutionalization of the parent AND provided full-time care for the parent who would otherwise have required institutional care for that entire time period. This is a very specific burden to meet. Just last month, the Superior Court of New Jersey held that a transfer made to a child caregiver who had taken care of her parent for five years prior to institutionalization and met all other requirements of the rule was not valid because the parent had left the nursing home and resided with her son for five months prior to moving back to the nursing home and making the transfer to the daughter. MK v. Dep’t of Human Services, Superior Ct of NJ, Docket No. A-0790-14T3.
So, what must we ensure that our clients have in order to make the transfer? First, we as attorneys must have a clear understanding of the Medicaid guidelines in our own states. Then we need to be sure our clients obtain, and we review, the required documentation. The Medicaid Child Caregiver Exemption generally requires the following documentation.
1. Doctor’s letter
I immediately require that my clients bring me the letter from the doctor as soon as they indicate they may qualify for the exemption. I encourage them to have the doctor state all conditions that the parent suffers from, the time period the parent has suffered from those conditions, and that BUT FOR THE CARE OF THE CHILD, the period of time the parent would have required institutional care. Medicaid may, after reviewing the doctor’s letter, request medical records; however, they do not generally need to be provided without Medicaid requesting them.
2. Proof of child’s address
To qualify for the exemption, the child is required to have lived in the parent’s home for the two years IMMEDIATELY preceding the institutionalization. The fact that the child owns a home and spent part of the time there may pose an issue. Any break in living together in the parent’s home may pose issues as it did in the New Jersey case.
3. Proof of relationship
If the child has a different last name than the parent, he or she needs to be prepared to present a birth certificate in order to prove relationship. Step-children generally do not qualify for the child caregiver exemption.
4. Proof the child provided full-time care
Medicaid may also ask for the past two years of tax returns. Clients may run into an issue here if they worked during the past two years. Generally, the exemption disallows any occupation other than acting as caregiver for the parent. However, in some states, part-time work outside the home is allowed when another child was providing services, or a caregiver was hired, during that time period.
Again, the first step in successfully transferring a home under the child caregiver exemption is knowing the rules of your jurisdiction. Second, we must make sure our clients can actually provide us with the proof required to meet Medicaid’s standards. Often, it is the second prong where we run into trouble. Medicaid rules are often not malleable, and documentation must prove that each prong of the state standard is met.
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Kimberly Brannon, Technical-Legal & Software Trainer – Lawyers With Purpose
If you had asked me a few months ago where you should mail your VA non-service-connected (NSC) disability pension claims, I would have answered with conviction . . . it depends! I’m not trying to be funny, it’s just that it literally depended on the state where the claimant resides. Every state is served by one of three Pension Management Centers (PMC): Philadelphia, Milwaukee, or St. Paul. Philadelphia, PA serves the eastern states; Milwaukee, WI serves the central states; and St. Paul, MN serves the rest of the states from Minnesota to the west coast. Alaska and Hawaii are served by the St. Paul PMC as well. Claimants living in Mexico, Central and South America, and the Caribbean should file in St. Paul for NSC disability pension claims and appeals of those claims. Residents of all other foreign countries should file such claims at Philadelphia’s PMC. See Resources below for mailing addresses and a list of all corresponding states and countries. The Pension Management Centers, as their name suggests, focus on pension benefits and do not handle any service-connected-disability compensation claims, or claims for both compensation and NSC disability pension, sometimes called dual claims.
Title 38 of the Code of Federal Regulations (CFR) §3.155 on “How to file a claim” begins, “The following paragraphs describe the manner and methods in which a claim can be initiated and filed,” but in all the detail that follows, nowhere does it tell you where specifically to mail a claim. The VA Adjudication manual M21-1 similarly fails to give such particulars. If you search online for “how to apply for veterans’ benefits,” you may eventually end up at the VA website that – as of the time this was written – still clearly directs you to “mail your application to the Pension Management Center (PMC) that serves your state.” However, since last year, rumblings of a change have begun to be heard that the mailing process may be undergoing an update.
That brings us to Janesville, WI, which may be familiar to those who file service-connected-disability compensation claims, but may not be to those of us who deal exclusively with NSC disability claims. It is the Janesville Evidence Intake Center (EIC) in Wisconsin where all claimants residing in states roughly west of the Mississippi have been filing service-connected-disability compensation claims for some time. However, Janesville may become the hub of a centralized mail intake system for all veterans’ pension AND compensation claims from all over the world. Since last year, the VA has periodically inserted with their correspondence the directive that all mail should now be sent to a PO box at the EIC in Janesville. In addition, an 11-page VA fact sheet on centralized mail processing was quietly issued in March 2016 stating that “New addresses for the submission of material went into effect on July 7, 2014.”
Per this fact sheet, the U.S. Postal Service is apparently automatically redirecting material that is mailed to Regional Offices or PMCs to Janesville. Specific PO boxes have been designated to specific categories of claims. However, from this hub, the claim will eventually be routed back to the pension management center where you are currently sending your claims for processing. Therefore, those who have been routinely filing NSC disability pension claims at the appropriate PMC may now be faced with a dilemma: obey the “new” – and by no means widely-known – directive, or continue as before. At our law firm, except for replies to VA letters that provide a specific return address, we continue to file all our claims at the appropriate PMC. Some law firms, in an abundance of caution, have started filing at both the PMC and the Janesville EIC. And yet others use only the addresses and fax number in Janesville that are given on the fact sheet.
So ask me today where you should mail your VA non-service-connected (NSC) disability pension claims and I will answer with conviction that you should take your pick – from the addresses provided below in the Resources section.
Resources
Philadelphia VA Regional Office
5000 Wissahickon Ave.
PO Box 8079
Philadelphia, PA 19101
Fax #: (215) 842-4410
Service Area: Connecticut, Delaware, Florida, Georgia, Maine , Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Vermont, Virginia, West Virginia, all foreign countries other than Mexico, Central and South America, and the Caribbean
Milwaukee VA Pension Center
PO Box 342000
Milwaukee, WI 53234-9907
Fax #: (215) 842-4430
Service Area: Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Tennessee, Wisconsin
St. Paul VA Regional Office
Pension Management Center (335/21P)
PO BOX 11000
St. Paul, MN 55111-0000
Fax #: (215) 842-4420
Service Area: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Minnesota, Montana, Nebraska, North Dakota, New Mexico, Nevada, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming, Mexico, Central and South America, and the Caribbean
Janesville Evidence Intake Center
Fax #: (844) 822-5246
Philadelphia PMC
Dept. of Veterans Affairs
Claims Intake Center
Attention: Philadelphia Pension Center
PO Box 5206
Janesville, WI 53547-5206
St. Paul PMC
Dept. of Veterans Affairs
Claims Intake Center
Attention: St. Paul Pension Center
PO Box 5365
Janesville, WI 53547-5365
Milwaukee PMC
Dept. of Veterans Affairs
Claims Intake Center
Attention: Milwaukee Pension Center
PO Box 5192
Janesville, WI 53547-5192
If you would like to learn more about becoming a Lawyers With Purpose member join us for our FREE webinar "Running Your Firm Like A Business" on Wednesday, July 27th at 8 EST / 5 PST. Click here to reserve your spot today.
By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Director of VA Services for Lawyers with Purpose.
Victoria L. Collier, Veteran of the United States Air Force, 1989-1995 and United States Army Reserves, 2001-2004. Victoria is a Certified Elder Law Attorney through the National Elder Law Foundation; Author of “47 Secret Veterans Benefits for Seniors”; Author of “Paying for Long Term Care: Financial Help for Wartime Veterans: The VA Aid & Attendance Benefit”; Founder of The Elder & Disability Law Firm of Victoria L. Collier, PC; Co-Founder of Lawyers with Purpose: and Co-Founder of Veterans Advocate Group of America.
“We have received information showing that because of your disabilities you may need help handling your Department of Veterans Affairs (VA) benefits.” That is how the letter usually begins. A claimant may receive this letter after benefit approval, when the VA proposes a rating of incompetency, which usually means a fiduciary will need to be appointed to manage the VA funds. Generally, the letter does not come as a surprise – one can anticipate such a proposal when the doctor completes the VA form 21-2680 citing dementia or other illnesses that may affect the mind as a diagnosis and/or indicating that the claimant does not have the ability to manage his/her own financial affairs. However, you may not be aware of how the determination of incompetency, or the appointment of a representative payee for any reason, will impact your client’s Second Amendment rights. The VA spells it out for you in the same letter that proposes a finding of incompetency in the section titled “How This Decision Could Affect You”:
A determination of incompetency will prohibit you from purchasing, possessing, receiving, or transporting a firearm or ammunition. If you knowingly violate any prohibition, pursuant to section 924(a)(2) of title 18, United States Code, as implemented by Public Law 103-159 of the Brady Handgun Violence Prevention Act, you may be fined, imprisoned, or both. – VA Adjudication Manual M21-1, III.v.9.B.3.b.
In fact, once the finding of incompetency is finalized or a representative payee is appointed for any reason, including the applicant appointing one for convenience, the VA will forward to the Federal Bureau of Investigations (FBI) the name of the allegedly incompetent VA beneficiary to be placed in a database called the National Instant Criminal Background Check System (NICS). Anyone attempting to legally purchase a firearm in the United States should have their name checked against the NCIS database by the gun dealer before the final sale.
Fortunately, the VA also informs you of how to seek relief from the prohibitions of the Brady Act:
If we decide that you are unable to handle your VA funds, you may apply to VA for the relief of prohibitions imposed by the Brady Act with regards to the possession, purchase, receipt, or transportation of a firearm. Submit your request on the enclosed VA Form 21-4138, Statement in Support of Claim. VA will determine whether such relief is warranted. – VA Adjudication Manual M21-1, III.v.9.B.3.b.
The NICS Improvement Amendments Act of 2007 (NIAA) amended the Brady Act so the VA is obligated to allow incompetent beneficiaries the opportunity to request relief from the latter act’s reporting requirements. The NIAA places the responsibility for administering the relief program on the VA. Note that relief from the reporting requirements of the Brady Act is not considered a “benefit” under Title 38. Therefore, principles common to the VA’s adjudication process that benefit the claimant, such as “benefit of the doubt” and “duty to assist,” do not apply. The burden of proof for these requests resides with the beneficiary, and the requests must be clear and explicit. The application for relief from these prohibitions is reviewed by a Veterans Service Representative (VSR) who must determine whether there is “clear and convincing evidence [showing] the circumstances regarding your disability and your record and reputation are such that you are not likely to act in a manner dangerous to yourself or others, and the granting of relief is not contrary to public safety and/or the public interest,” according to VA Adjudication Manual M21-1, III.v.9.B.4.e.
In order to be successful, the application for relief must include a statement from a primary mental-health physician assessing mental health status over the last five years, medical information addressing any mental health symptoms and whether or not the claimant is likely to act in a manner dangerous to himself/herself or to the public, and evidence of his/her reputation, through character witness statements, testimony, or other character evidence. The VA will also seek your signature on a consent form that allows them to run a criminal background check. VA decisions that deny relief are not subject to review by the Board of Veterans’ Appeals. They are, however, subject to review in Federal District Court, and for this reason, all such decisions must contain a detailed explanation of the basis for denial.
To date, there has been no case pushed to the Supreme Court to determine if the actions of the VA are constitutional. David Goldman, a nationally recognized gun trust attorney, suspects it will likely take the involvement of the NRA or the Second Amendment Coalition to get a case heard before the Supreme Court on this issue.
Until that time, it is up to us to protect our clients and their firearms. In Henderson v. US (575 US ____ Docket No. 13-1487 (2015)), the SCOTUS held that a person not entitled under the federal law to possess firearms has not also lost the property right to the same. This decision makes gun trusts a vital tool. By placing the guns of a client who has been deemed incompetent into a gun trust, we can allow the client to maintain ownership of the guns the client wishes to protect. However, it is important to understand that the client cannot, under current rules, have actual possession of the firearms. This means the client cannot be the trustee of the gun trust and the firearms must not be accessible to the client. So, the trustee must lock the guns in a cabinet or move them to some other location the VA applicant cannot access. Failure to follow these rules can and has resulted in guns being seized from veterans.
Hopefully, this issue will get to the Supreme Court in the near future. However, in the interim, we need to proceed with caution in appointing representative payees in cases where it is not necessary for our clients with guns. When representative payees are necessary due to incompetence, the veteran may not maintain possession, but only ownership, of his firearms. The establishment of a gun trust under the correct guidelines can afford our clients the ability to maintain their guns.
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By Sabrina A. Scott, Paralegal, The Elder & Disability Law Firm of Victoria L. Collier, PC and Director of VA Services for Lawyers with Purpose.
Victoria L. Collier, Veteran of the United States Air Force, 1989-1995 and United States Army Reserves, 2001-2004. Victoria is a Certified Elder Law Attorney through the National Elder Law Foundation; Author of “47 Secret Veterans Benefits for Seniors”; Author of “Paying for Long Term Care: Financial Help for Wartime Veterans: The VA Aid & Attendance Benefit”; Founder of The Elder & Disability Law Firm of Victoria L. Collier, PC; Co-Founder of Lawyers with Purpose; and Co-Founder of Veterans Advocate Group of America.
