VA’s Fiduciary Program

Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to provide The American Legion’s views on the Department of Veterans Affairs (VA) Fiduciary Program.  We testified on April 22, 2010 on this same program and while there have been some improvements; more still needs to be done.

VA oversees appointment and management of fiduciaries who act on the behalf of veterans/surviving spouse or dependent children referred to as “beneficiaries” who are deemed mentally incompetent and unable to manage their finances.  Upon notification of incompetency, a VA Field Examiner will investigate the beneficiary’s social, economic and industrial impairment then recommends appointment of a fiduciary.  The VA Fiduciary is responsible for managing VA monetary benefits ensuring the beneficiary’s just debts are paid.  Other responsibilities include utilizing funds for daily needs such as food, clothing housing, medical expenses, and personal items of the beneficiary and his /her recognized dependents.  The veteran should be able to live a lifestyle as any other person who is not within the Fiduciary program.  The appointed Fiduciary is allowed to charge a fee of up to 4% of the VA benefits paid to the beneficiary. If the beneficiary is married, the spouse may receive payments on the beneficiary’s behalf.  Selection of a Fiduciary involves analysis of current credit report, disclosure of criminal background and consideration of the opinion of character witness(es). 

In 2008, the Veterans Benefits Administration, which oversees VA’s Fiduciary Program, established a Western Hub Fiduciary Hub pilot program in Salt Lake City, UT.   Prior to the consolidation, VA Regional Offices (RO) were performing poorly in the average number of days to appoint a fiduciary and also with the average number of days for follow up visits.  At the time of our testimony in 2010, the Western Hub Fiduciary average for initial days to appoint fiduciaries was 45 days and that number decreased to 38 days in FY 2011.  However, the average number of days for follow up visits in 2010 was 120 days but in FY 2011 that number increased to 151 days. 

After the Western Hub Fiduciary model became operational in 2010, VA began consolidation of other regions across the United States in Fiscal Year 2012.  Those Hubs and locations include: Indianapolis, Milwaukee, WI; Louisville, KY; Lincoln, NE and Columbia, SC. VA is adding an additional 58 Field Examiners to their current number of 310.  Unfortunately, these 58 additional personnel are being pulled from other areas of the Veterans Benefits Administration (VBA) such as Compensation (currently experiencing backlog).  A total of 368 Field Examiners will be responsible for approximately 123,000 beneficiaries.  Equally disturbing is that new Field Examiners training consists of two weeks formal training, an additional two weeks field training and then they are assigned a mentor for 60 days with 100 percent review for the following 90 days.  Field Examiners do not work within the Regional Office or at the Hub but from-their homes.  Moreover, Field Examiners are not required to provide contact information to beneficiaries.  The assigned location of the Field Examiner is determined by population density of beneficiaries.  This however, does not take into account the travel time in less populated states with larger geographical areas. 

Previous Recommendations:

The following recommendations were presented at the time of our last testimony and here is an update on their progress: 

  1. The American Legion recommended an additional Full Time Employee (FTE) be funded and authorized within each RO and PMC solely dedicated to Fiduciary Program management and oversight. 

Currently: VBA does not feel this is necessary with the implementation of an 800 number currently being tested which will be solely dedicated to Fiduciary issues.  This 800 number will direct the caller to the Fiduciary Hub within the callers region or allow the caller to request assistance from another Hub outside the calling area.  Until it becomes fully operational, callers are directed to call 1-800-827-1000.  VBA changed their claims assistance toll free number (827-1000) from RO access and consolidated them into areas. Unfortunately, this has become an exercise in futility as the call centers are so busy the caller is asked to leave a number to be called back which more often than not does not happen.  The American Legion continues to urge Congress to ensure VBA hires a Fiduciary Program Coordinator to work within each Regional Office to improve coordination between Fiduciary Hubs, ROs and Field Examiners.

  1. The American Legion recommended Congress appropriate funding to VBA’s Information Technology (IT) budget to set up an IT software package within all of the RO’s Fiduciary Program Units, PMCs, and Salt Lake City Fiduciary Hub to enhance communications between each of these offices. 

Currently: The VBA Fiduciary program is in the progress of creating Fiduciary Screens within the current Veterans Benefits Management System for tracking status of Fiduciary claims. The software program is currently being written with a projected completion date of approximately two years.  A target date for implementation of the program is not available at this time.

  1. The American Legion recommends that part of the software package include reminders or alerts throughout the process to ensure that no paperwork is lost or falls through the cracks.  This recommendation and current status is addressed above.
  2. The American Legion recommends that appointed Fiduciaries must be co-located within the at least a 300 mile radius of the beneficiary. 

 

Veteran Personal Stories:

The importance of solving the issues associated with VA’s Fiduciary programs can best be illustrated with the personal stories of some affected veterans.  All too often, by simply looking at numbers, program projections and reports, we forget the human face of this problem.  Because of the nature of the competency challenges involved for veterans requiring a Fiduciary, these are among our nation’s most vulnerable veterans.

In August of 2011, the Western Area Fiduciary Hub was notified that a veteran was rated incompetent and a field examination for a fiduciary was required.  The son of this veteran, already the court appointed Power of Attorney for this veteran, requested to be appointed fiduciary for this veteran, but this family request was not granted.

By late September, a Field Examiner completed an examination, and appointed an outside fiduciary for the veteran.  However, two months later, in November, the veteran’s local Regional Office released to the fiduciary in question a check for $385,966.  As there had been no previous notification of any back payment, the fiduciary contacted VA for information about how to process this overlarge payment, and was informed she would need to obtain a surety bond to protect the funds and that the Field Examiner would have to contact her to complete a new budget for the veteran. 

This situation is still being investigated, including the possibility that the veteran’s son, who had initially sought to be appointed fiduciary as the veteran’s Power of Attorney, may well wind up being finally designated as such.  However, months have gone by and the veteran is unable to gain access to money that is rightfully his.

In another matter, a veteran applied for Pension benefits in 2009.  In 2010, with a diagnosis of ischemic cardiomyopathy from private medical records, the veteran’s claim was upgraded to a straight benefits claim under the presumptions inherent for Agent Orange related illness.  Further medical evidence established, over the course of 2010, multiple related conditions dating back as far as 2007, as well as the need for specially adaptive housing amongst other concerns.

 

In a VA letter dated March 23, 2011 the entire estimated back pay was found to be $163,256 the entirety of which was withheld.  Fully seven months later, in late October, the veteran received a decision letter stating:

“Review of your claims file shows the rating decision of March 22, 2011, proposed a finding of incompetency. It was noted in that decision there was a Delegation of Rights and responsibilities signed by you and your physician that you are not able of understanding your rights due to dementia due to Parkinson’s disease, dated August 25, 2010. You were sent a VA letter dated March 23, 2011, informing you of our right to submit any evidence, information, or statement that will present your side of the case.  To date, no response has been received from you.  Since there is a definitive finding if incompetency by a physician in this case and you are not shown to be able to manage personal affairs to include disbursement of funds, we have determined you are incompetent for purposes of managing VA payments.”

 

Ultimately, the veteran passed away awaiting appointment of his sister as fiduciary.  During the entire process, his sister had been providing for his nursing care and doing so out of her own pocket.

These two examples provide insight into cases where close family members are already providing close care to these veterans, in some cases with court appointed POA authority, yet these veterans still must wait months and even years to receive hundreds of thousands of dollars in benefits.  These benefits belong to these veterans, yet they can derive no use from them as they are held back beyond yards of red tape and miles of obstacles and delays.  We cannot keep veterans from benefits belonging to them, and sadly these cases are not unique.  American Legion service officers come across stories like these on a regular basis and have been all to eager to share these stories in the hopes that some good will come towards reforming this system.

Conclusions:

It is worth reiterating that these are among our most vulnerable veterans.  As the nation’s veterans experience mental health trauma or diseases, they or their family members should not have to worry about receiving their earned benefits.  While The American Legion recognizes VA’s attempts to improve the situation, clearly there is still much work to be done.  The Fiduciary Hubs may have shown some improvement in reduced timelines for a portion of the process, the phone banks for these centers still lack direct access for veterans’ service officers, and the remote nature of these facilities adds an additional layer of remove from these increasingly vulnerable veterans.  Furthermore the improvements to manpower for this task cannot come at the expense of manpower in the regular claims processing, as all are aware of the backlog struggles in that arena.  The American Legion, through our network of service officers, is working hard to gain justice for these veterans as these difficult scenarios present themselves, but clearly this problem will not be solved overnight.

 

Joyspower

May 1, 2012 - 8:00am

After a near-fatal auto accident I was ruled incompetant by a probate court. I was never told of the court action. Attorney fees were assessed to my estate in the amount of well over $30,000. The Veteran Administration was never notified, and my disability compensation contiued to be directly deposited, however I had no control of my bank account. The current processing time through the fiduciary system is well over 6 months. This process should be at the individual local hospital where the veteran is to be seeen and assessed.

Arbrne

June 12, 2012 - 7:40pm

I am a disabled Army Veteran, and Field Examiner for the VA Fiduciary program. I am offended at the way the Legion tries to demonize the Fiduciary program. The VA has a lot of issues and the fiduciary program does also. But as an examiner I take great pride in making sure veterans who are at risk of being taken advantage of are protected and able to have their benefit available to them. The fiduciary program is not responsible for the release of retro funds. Although the funds cannot be released until a suitable fiduciary is appointed the fiduciary hub does not release these funds. PMC or the VSC are responsible for funds release. Not all fiduciaries receive a 4% commission. First off family cannot receive commissions next often times this fee is negotiated down or not taken at all. And in comparison look at what local courts allow to be taken by conservators court fees can range into the thousands yearly.
Next you sighted 2 cases where a veteran did not receive their funds. What about the tens of thousands (and yes there are that many) where fiduciaries have helped vets get on their feet and improve their lives. I rarely appoint a professional fiduciary. My first choice is to appoint the veteran as his own payee, next spouse, then any and all family who are willing are considered, then as a last resort a third party. 90%+ of my fiduciaries are the veterans family. There are times when family cannot be appointed for various reasons (credit, criminal , inability to obtain a bond, or they just don’t want the responsibility) In these cases unfortunately a third party has to be used. It should be noted that most cases of misuse of veterans funds and abuse are by family members including spouses. I screen fiduciary’s based on the wants of the veteran (yes what the veteran wants is heavily considered) and the laws and regulations in placed by congress. Power of attorney has no screening process. Anyone can become one all it takes is a signed letter form the veteran, who may or may not be mentally compromised so basing appointment solely on power of attorney would be foolish.
In reference to your request that a fiduciary lives within 300 miles what about family members that don’t live within that radius. This would force the veteran to have a professional appointed and a fee taken on his benefit simple because of geography. I think this is a foolish request and not well thought out.
The hubs have a 1-800 number available to all fiduciaries solely for the purpose of fiduciary business. They are not directed to the normal 827-1000 number unless it involves a claim.
The previous post involves the state appointing a conservator not he VA so it is not relevant to the fiduciary program.
The current time line for an initial appointment is 45 days and the Hubs are working hard at maintaining those times. but there are family members and disabled veterans schedules to deal with. follow up visits should be completed in 120 days of request. The ever increasing number of incompetent veterans (WWII and Korea veterans mostly who suffer from age related deceases) is straining the few Field Examiners the VA has. The extra examiners the Legion opposes are needed to make sure that our most vulnerable veterans are being cared for in a manner they deserve. The fiduciary program is not here to take away veterans money or make it so family cant care for their loved ones. It is however here to make sure these veterans are cared for and not taken advantage of.
As a disabled veteran I have had my battles with the VA and I don’t always agree that they are doing their best. But publishing skewed or false information is not the right way to change things. I am sure I can drag up all kinds of accusations and stories of the legions mishandling of veterans.. The point is to work towards an end that ensures our veterans are cared for with dignity and respect. I appreciate the work the legion has done on behalf of our veterans and I hope they will continue to serve those that served.

Markrod420

October 21, 2013 - 12:34pm

If you are so offended by the way they framed this obvious taking of liberties and attack on veterans, then kindly respond to Mr. Dilber1.

dilbert1

August 12, 2012 - 8:06pm

As the child of a veteran, one who is receiving disability compensation benefit, I too had to be approved after filing a NOD upon receipt of the finding that my veteran parent was determined by the RO to be unfit to handle his VA benefits: I myself , after meeting all of the back ground requirements of the VA Fiduciary administrators, I was appointed my parents VA fiduciary; I qualified for the required bond (that cost is paid by the veteran, depending on veterans $ assets, that fee could be thousands of dollars per year for that one insurance premium, if anyone is are unaware.
As to myself being related to the beneficiary’ I receive no compensation for this fiduciary service, but undertake 100% of the legal and financial responsibility.
I wish to raise some key issues, that of the VA RO raters and VA Fiduciary administrators placing incompetent veterans at risk, regarding their prepared estates, then the beneficiary of those estates (spouses and dependants) who are being placed in legal jeopardy too – that of probate court - which Is selective discrimination, punitive even, even if claimed to be in the interest of protecting the veteran and dependants.
Bank accounts titled “Representative Payee” set up by the appointed fiduciary on behalf of the veteran beneficiary, that Representative Payee could be a relative of the beneficiary, here is the rub: the veteran, who cannot transact on the bank account due to the incapacity finding of the VA, though the veteran is the legal owner of the bank accounts, that veteran CAN NOT SIGN A BENEFICARY FORM TO TRANFER HIS FUNDS TO HIS/HER BENEFICIARYS AFTER DEATH TO AVOID PROBATE COURT BEFORE THE VETERAN DIES – neither can the representative payee arrange on behalf of the veteran to fill out such bank beneficiary forms, if doing so rightly to appoint the veterans own preexisting trust .
Conflict of interest issues for non family representative payees put aside; what if the veteran has a preexisting living trust with will, what if the veteran had a durable power of attorney, what if the veteran had a medical care proxy, what if all of these legal instruments were in place before the veteran was disability rated by the VA RO, before the RO asked for the veteran to be deemed incompetent, and before the veteran was required to be assigned a “representative payee,” one which could be a family member and perhaps an heir of the veteran’s estate?
Here is the problem; the Social Security Administration reviewed and found they would accept the legal instruments which the my veteran parent had put in place prior to his VA RO rating and competency finding, the SSA respecting the durable power of attorney and medical proxy, even if the veteran was deemed incompetent for purposes of handling his financial affairs - by the VA RO purposes alone – the VA RO’s finding should have no further legal impact on the veterans non VA legal and financial affairs – but it does!
I’m sure the Americans with Disability ACT, then all impacted veterans rated as being incompetent to handle their VA benefits due to service connected injuries or age related issues being one unavoidable consequence, the veteran finding themselves unable to assign a designated beneficiary only for these “representative payee” titled bank accounts owns, accounts which the veteran must deposit their VA benefits into by law, as those accounts – for reason which the bank and the VA fiduciary have been unable to fully explain to me, which will then require an attorney to explore, that cost paid for at the expense of the “incompetent veteran” just to enforce the veteran’s prior trust arrangements which that veteran had made prior to being rated and receiving benefits from the VA - this is discrimination against veterans with disabilities and then disrespectful toward the dependants and beneficiaries of these impacted veteran’s estates too . A veteran’s VA benefits could be better used supplementing their care or assisting with other financial burdens like the upkeep of a home, clothing, food, medical care, or providing economic support for their qualified dependants.

With one key change by the VA RO’s regarding the veterans competency finding, one from” incompetent” to “competent,” that VA RO rated “competent” veteran can then appoint a beneficiary for any of their bank accounts, as that veteran avoids the need to use a “representative payee” titled bank account and then avoids both the legal and financial jeopardy it poses to their dependants and estate by not being able to assign a beneficiary to whom the bank can disburse the veteran’s funds only to AFTER their DEATH, avoiding state probate and legal costs to settle the estate.
Can someone please respond to this discriminatory disparity placed on the disabled veteran by the VA RO and the VA fiduciary administrators?
Why does the VA suggest that veterans get life insurance policies then, that instrument has to have a beneficiary of record – but why are “representative payee” bank accounts ill eligible of having this same option? Clearly this is discriminating against this one veteran demographic group being labeled as “incompetent for purpose of handling their VA benefits alone,” - the is VA imposing unnecessary legal costs on this one disabled class of veterans, their dependants and heirs, who are unable to protect VA benefits from being probated in state court.
If a representative payee purchases a CD for a incompetent veteran, and that veteran dies being unable to preselect a beneficiary for that CD upon death, the bank will close out the CD account, the veteran and his estate will LOOSE all of the occurred interests, that CD account and ALL other representative payee purchased and then titled accounts or instruments will have to then be probated – why?
Disabled veterans have a right to disburse there assets upon death and as directed by will and trust as they desire to, they must have the right to avoid probate for any of their estates assets before they die – without undue influence of the blind burecratic do-gooding of the VA, even if done in the name of serving disabled veterans and their dependants, as in this specific instance I describe.

jsdempsey

January 19, 2013 - 11:36am

My Mother was finally named as Fiduciary for my father on June 22 with back payments deposited on July 13. Unfortunately between the time of the interview and the processing my Mother was found to have colon cancer and passed away July 16 as a result of the surgery. Since July 24 I have been trying to be named as my father's Fiduciary since I have all other responsibilities for his finances. They actually stopped his payments after October 1 and as of 1/19/2013 still have not set up an interview for a Fiduciary. This process is so broken and has caused so much frustration, despair and anger on behalf of my father who can no longer speak up for himself. I am preparing a series of events to send to our representative so that he can possibly bring it up as well. The irony in all of this is the process the Social Security office uses is somewhat similar but it is so well documented that it took exactly the timeframe for each step to occur and it caused only a 15 day delay in his benefits being resumed after my Mother's death. It is through tears that I am writing this.

pfcporter

October 1, 2013 - 10:34am

I was deemed incompetent with out having a hearing they lied about contacting my mother or friend to be payeee my payee puts her job before my needs the field supervisor talked to me aaasas if i was a child i also have back pay coming i can handle my affairs

pfcporter

October 1, 2013 - 11:54am

My check came monday the payee cant dispurse my funds on time because she is at work why is that?

Jose007

November 5, 2013 - 7:28pm

My Mom is the Fiduciary for my Father. It's better to have every thing spelled out befire you get in trouble. If you need a lawyer call my buddy who is the
best PERSONAL INJURY LAWYER Cypress TX

Edward Tilton

November 19, 2013 - 4:49pm

I am the fiduciary for my son a disabled veteran. Under the agreed plan he is to recieve $850 a month spending money. That being $25 a day. For a decade I accomplished this by withdrawing $300 at a time from his account using his ATM. Now the Fiduciary Hub is demanding evidence that I have given this money to my son and telling me that I cannot use his ATM to obtain that money.
If I can not withdraw money how can I pay him his daily allowance. Aside from being called a theif by the call center I am simply caught in a catch 22

Charles

March 27, 2014 - 7:24pm

I AM A VET THAT HAS BEEN FOUND INCOMPETENT.My monies are being withheld pending the appointment of a fiduciary.My caregiver has been handling my finances for over 2 years.I have fought for 4 yrs with the VA over aid Attendance.I have finally won only to learn that now it could be another 2 years before the funds are given.I have lost my home car and everything else and these people just laugh when I call.Funny a crack addict is not incompetent. you know what they spend there welfare check on.I was also told the VA will not recognize a NC durable power of attorney.That is filed with the clerk of court that clearly states my care giver has power over Va benefits.The field rep has not bothered to return calls . I say close the VA down allow vets to use private sources.The VA is unable to use our tax dollars responsibly

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