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My Elder is receiving VA Benefits - can we sell or rent the homestead?

If your elder is receiving VA pension benefits, which typically means Aid and Attendance, he or she is allowed to own a home as a non-countable asset. A problem may occur if the elder is not living and home and the family wants to sell or rent it. Selling or renting the home will most likely stop the VA pension benefits as you would be converting a non-countable asset into a countable asset. The VA cross-references with the IRS and they will find out about the home sale, so you should do something to help.

It is likely that the best solution to selling or renting the home when an elder is on VA benefits is to place the property into an irrevocable trust. This trust has a lot of potentially positive benefits in the right situation, such as:

  • Avoiding probate upon the elder's death;
  • Allowing the property to be sold tax free (if it has appreciated less than $250,000);
  • Allowing rental or the property while the elder is in a nursing home/assisted living;
  • Allowing a step-up in basis upon the elder's death so heirs can sell it tax free;
  • Starting the Medicaid five year "look-back" period;
  • And more . . .

If your elder is looking to apply for VA benefits, or if you just want to consider protecting the homestead property from the nursing home, please fee free to download a copy of my free report on protecting your Florida homestead property.

D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney
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