The application process veterans undergo to receive benefits from the Department of Veterans Affairs can be arduous for themselves and their families. One particularly frustrating aspect of the process arises when a fiduciary needs to be appointed to manage a veteran’s finances and other assets.
Over the past few years, countless individuals have used the internet to share stories of fiduciaries who take advantage of the veterans in their lives. Although fiduciaries are technically asked to provide their services to veterans for free, they do have the ability to charge veterans monthly service fees — and they usually do. Furthermore, once a fiduciary is appointed, it’s incredibly difficult for the decision to be reversed, so countless veterans have fiduciaries who continue to siphon money from them on a monthly basis.
On January 4, 2011, the VA launched a fiduciary website that offers information to friends and family members interested in becoming a veteran’s fiduciary. Though the VA must still appoint the individual as a legal fiduciary, those close to veterans now have to ability to retain control of their finances, estates and benefits without having to pay the hefty fees charged by fiduciaries who work for the court.
This also means that individuals who are unfamiliar with surety bonds will need to familiarize themselves with the process. The VA established the fiduciary bond requirement to ensure that veterans have the ability to recollect their losses if fiduciaries should misuse funds entrusted to them.
According to the VA’s fiduciary website, the bond amount needed is determined based on the
value of the personal estate derived from Department of Veterans Affairs benefits plus the anticipated net income from Department of Veterans Affairs benefits received during the ensuing accounting period.
Because the bond amount required for fiduciary bonds is equal to the veteran’s total estate, some individuals might not qualify for the surety bond that’s required to become a legal fiduciary.
If a fiduciary does mishandle a veteran’s funds, a claim can be made against the bond to compensate for financial losses or other damages. If a fiduciary fails to purchase the fiduciary bond as outlined in §14.709, then the the Regional Counsel would not only notify the Veterans Service Center Manager, but also take the fiduciary to court.
In the end, the surety bond requirement for the VA fiduciary bond has not changed, but the potential audience to which it applies has. The range of potential fiduciaries has increased exponentially. Although some probate officers who work for the government might lose money from this change, veterans and their families will be able to hold on to more of their own money.
For more information on VA fiduciary bonds, click here.