The Department of Veterans Affairs (VA) has a Fiduciary Program to protect veterans who are not able to manage their own financial affairs. Veterans benefits are paid to the fiduciary, who is expected to manage the funds on the veteran’s behalf.
A veteran can be deemed incompetent due to mental disability, advanced age, or even physical infirmity. A finding of incompetence must be supported by medical evidence or a court ruling. In some cases, a court may have ruled you incompetent, and then the VA will also find you incompetent to manage your benefits.
Other times the VA will rely on the findings made by the VA doctor who conducted the Compensation and Pension Exam when deciding that a veteran is incompetent. The Compensation and Pension exam is the exam that is ordered to evaluate your disability after you have applied for disability compensation. The report from this exam will contain a medical opinion about whether or not your disability is service-connected, but may also include information about your mental capacity to handle money.
The VA also relies on medical findings from your routine medical visits to the VA (or a private physician) when deciding if you can handle your own VA benefits or not.
Being found incompetent by the VA to manage your VA benefits will not affect your right to handle other finances or assets you may have.
The VA conducts a Field Examination in order to appoint a fiduciary. During the Field Examination, the veteran is asked to provide information about monthly bills, assets, and medications, as well as an emergency contact information and contact information for the veteran’s primary care physician.
Normally veterans are allowed to select their own fiduciary. For a family member (or anyone else) to be appointed, that person will first be subject to a background investigation, which will include checking criminal records, personal credit, and references. You or your proposed fiduciary must apply to the VA fiduciary program before the fiduciary can be appointed.
While VA policy states that a veteran is allowed to choose a fiduciary and that a relative of the veteran should be preferred, sometimes the VA declines to appoint qualified family members and instead appoints paid fiduciaries, who too often mismanage or withhold funds.
If you have concerns about a VA-appointed fiduciary, notify the VA. You can do this by calling the agency at (888) 407-0144 and selecting the appropriate regional hub. If you would like a new fiduciary, let the VA know. You have the right to have a new fiduciary assigned to you at any time.
Veterans can appeal a VA finding of incompetency to the VA Regional Office that issued the finding or the Board of Veterans Appeals (BVA) by providing new medical evidence. If the VA Regional Office does not reverse the finding of incompetency, it can be appealed to the Board of Veterans Appeals (BVA) and, if necessary, to the Court of Appeals for Veterans Claims (CAVC).
At any time, you can also ask to have the VA reassess your ability to manage your VA benefits by submitting a reevaluation request, in writing, to your regional office.
Veterans can appeal the VA's selection of a fiduciary to the Board of Veterans Appeals or to the VA Regional Office that made the selection by providing evidence that may about the assignment.
For years the VA claimed that its selection of fiduciaries was entirely within its own authority and not subject to judicial review. This gave many veterans no recourse when their funds were mismanaged or withheld. In April 2011, the U.S. Court of Appeals for Veterans Claims (CAVC) changed that. Veterans now have the right to appeal the selection of a fiduciary to the CAVC.
This means that if the VA Regional Office and the Board of Veterans Appeals denies a veteran's appeal, that lawsuit can now be taken to the U.S. Court of Veterans Appeals.
You file an appeal by submitting a Notice of Disagreement with the Regional Office that issued the decision you disagree with. Read our article on how to appeal a VA decision for more information. (Although this article pertains to disability compensation benefit denials, the basic principles pertain to all types of VA appeals.)
When you apply for disability compensation, the VA will send you for a Compensation and Pension Exam at your local VA medical center to evaluate your disability. If you are able to manage your own money, make sure you are very clear about this when asked about it.
The doctor who examines you will write a detailed report for the VA. If the VA doctor who examines you asks you about your ability to manage your finances, your answers will appear in the report. If you tell the examining doctor that you need help paying your bills or have problems budgeting your money, then the VA may deem you incompetent to manage your VA benefits. Explain that you are able to handle your money without assistance.
While the VA is notorious for being a complex, slow-moving bureaucracy, the VA Fiduciary Program stands out as especially complex and difficult to navigate. If you would like to challenge a finding of incompetency or have a fiduciary replaced, it is advisable to find a veterans law attorney to assist you.