Featured
> Master Condition List
> Federal Benefits List by Combined Ratings
> Insight into the Claims Process (VBA Perspective)
> Rating Schedule Index
> Filing a VA Disability Claim
> Filing an Appeal

> Death/Survivor Benefits

> Education & Employment

> Health care

> Housing

> Miscellaneous

> VA Disability Compensation

> VA Pension

Financial Incompetence (Fiduciary)

In the event the Veteran or other eligible dependent (beneficiary) is found unable to handle their financial affairs the VA will have a fiduciary assigned.

The duty of a fiduciary is to look out for the beneficiary's best interest financially.

IMPORTANT NOTE:

  • If a court finds that someone is incompetent, the VA is NOT bound by that ruling! So the VA CAN disagree with the court, if they find it appropriate!

Due Process

Before the VA can find someone incompetent (requiring a fiduciary), the VA MUST* first propose the action! Only after the VA has finalized this decision will a fiduciary be assigned if appropriate.

*Only exception is if the person has been declared incompetent by a court of competent jurisdiction or if a guardian has been appointed for the beneficiary based upon a court finding of incompetency, then the VA can immediately issue a decision. HOWEVER, if a hearing is requested it MUST be held prior to a final decision of incompetency.

For information on handling a proposed action click HERE.

The Brady Act of 1993

For those found incompetent by the VA AND who have an order or finding of a judge, magistrate, or other judicial authority of competent jurisdiction which finds that the beneficiary is a danger to self or others are PROHIBITED by law from purchasing, possessing, receiving or transporting a firearm or ammunition.

Relief from the Brady Act

Those who feel they are no longer a danger to themselves or others can request the prohibitions removed by Submitting a Personal statement “Requesting relief from the Brady Act”. VA will then open up a ‘claim’ to handle the request. Afterwards, the VA will send a letter explaining what evidence is needed to support the request.

IMPORTANT NOTES:

  • VA has NO Duty to assist to obtain medical records or conduct medical examinations in support of this request!

  • If the VAs decision of incompetency is ever successfully appealed, relief from the Brady Act will be automatic.

  • A grant by VA of a request for relief only removes the prohibition against purchasing, possessing, receiving or transporting a firearm or ammunition under the Brady Act. Those seeking relief from the prohibition against handling explosives under the Safe Explosives Act of 2003 to the Bureau of Alcohol, Tobacco, Firearms and Explosives need to click the following link to Apply for relief of explosives disability.

Fighting a Final Incompetence Determination

Once VA has found the beneficiary is incompetent, the decision CAN be appealed!

For information on filing appeals click HERE.

Selecting a Fiduciary

The VA would rather the beneficiary pick a fiduciary themselves than have the VA make the selection.

Before a fiduciary can be assigned the proposed fiduciary must pass an investigation which includes:

  • Criminal background check;

  • Review of credit report;

  • Personal interview; and

  • Recommendations of character references.

If the beneficiary is unable to select someone who is able to pass the investigation. The VA will assign a professional fiduciary.

Replacing a Fiduciary

At any time the beneficiary may request a different fiduciary by sending a written notice to their nearest Regional Office (RO).

Responsibilities of a Fiduciary

The primary responsibility is to manage the beneficiary‘s VA income and ensuring the beneficiary‘s bills are paid.

Additional, responsibilities of the fiduciary include, but are not limited to the following:

  • Utilizing the funds for the daily needs (e.g., food, clothing, housing, medical expenses, and personal items) of the beneficiary and his/her recognized dependents.

  • Never borrowing, loaning, or gifting funds belonging to the beneficiary.

  • Reporting any of the following changes to the Fiduciary Activity immediately:

    • Change in address or phone number of the beneficiary or fiduciary

    • Change in income or dependents

    • Incarceration of the beneficiary

    • Hospitalization of the beneficiary in a VA or state facility, and

    • Death of the beneficiary or the beneficiary’s dependents

  • Establishing a properly titled bank account as follows: (Beneficiary’s Name), by (Fiduciary’s Name, Federal Fiduciary).

  • Never commingling the beneficiary‘s funds with those of another.

  • Never withdrawing cash from the beneficiary’s account by counter check or ATM withdrawal.

  • Timely submitting periodic accounting when required.

  • Keeping accurate, complete records and receipts, regardless of any requirement to submit periodic accounting.

  • Conserving excess funds in a federally or state insured interest bearing account or United States savings bonds.

  • Registering saving bonds to reflect proper ownership and the existence of the fiduciary relationship, as follows: (Beneficiary‘s Name), (Social Security Number), under custodianship by designation of the Department of Veterans Affairs.

  • Reporting any event that affects the beneficiary‘s payment or entitlement to benefits and promptly returning any payment that the beneficiary is not due.

  • Notifying VA of any changes or circumstances that would affect your performance as a payee or your decision to continue to serve as a payee (e.g., you sell or transfer your business).

  • Returning any funds owned by the beneficiary to VA if they stop serving as the fiduciary.

  • Notifying the VA if the beneficiary‘s condition improves to a point where they believe he or she no longer needs a fiduciary.

  • Protecting the beneficiary‘s funds from the claims of creditors since the beneficiary‘s funds are protected by law.

Fiduciary Accountings Submission Tool (FAST)

FAST is a tool that assists fiduciaries submit:

  • New accountings,

  • Review existing accountings; and

  • Provide accounting revisions in a centralized repository.

Click HERE to learn more about how to use FAST.

Frequently Asked Questions

  • CLEAR and convincing evidence in the form of:

    • Medical documentation; or

    • A court of competent jurisdiction

    That you are unable to handle your financial affairs. HOWEVER, if there is ANY doubt the VA MUST not find you incompetent!

  • No, only if you can't manage your financial affairs.

  • Yes, the VA will reevaluate your conditions that formed the original basis of the need for a fiduciary. Which if appropriate, CAN result in your ratings being reduced.

References