Challenging VA Fiduciary Appointments

Certain physical and mental health conditions may leave a Veteran unable to manage their own financial affairs. If you are incapable of functioning on your own due to a service-connected disability, you may need to have a professional manage your money for you. If your service-connected disability is severe enough that it leaves you mentally or physically incapacitated, the VA might even require you to have outside financial management in order to maintain eligibility for receiving disability benefits.

If a Veteran is receiving VA benefits or benefit payments and is deemed unable to take responsibility for their own finances, whether this is deemed through a credit report or in field examination, your VA regional office may require that the Veteran have a fiduciary to manage VA funds on their behalf. The appointing of a fiduciary serves to ensure that the Veteran’s benefits are spent in their best interests. If the VA suspects that a disabled Veteran will not be able to responsibly use their VA disability benefits without outside help, they may bar the Veteran’s access to disability compensation without the appointment of a fiduciary.

Once the Department of Veterans Affairs receives information that a Veteran is unable to manage their own funds, either through a VA decision or court ruling, the issue will be referred to the VA Fiduciary Hub. The Fiduciary Hub will determine a suitable fiduciary and oversee the VA’s fiduciary programs performance.

For Veterans suffering from severe physical or psychological disabilities, a VA-appointed fiduciary can be a helpful and essential asset. However, there are some circumstances when a disabled Veteran may have a desire to dispute the appointment of a fiduciary or choose a different fiduciary from the one they have been assigned. In this article, we’ll talk about challenging VA fiduciary appointments and fiduciary programs – how it works, and the extent to which you can contest a VA decision regarding if an accredited caregiver or another Va beneficiary or payee manages your funds.

What If I Don’t Want A Fiduciary?

It is understandable that someone who is required to have a fiduciary may not want to have that requirement. The appointment of a fiduciary can feel condescending, especially if you feel confident that you are capable of managing your VA disability benefits and monthly benefits on your own.

If you feel that you have been wrongfully required to have a fiduciary manage your VA benefits, you may be able to challenge the VA’s decision. A Veteran may challenge the requirement to have a fiduciary by submitting medical evidence that a doctor or health care provider has determined the Veteran to be competent to handle their own funds. If the Veteran has been required to have a fiduciary because a court has found the Veteran unable to manage their funds, then the Veteran will need to get a court order showing that the Veteran can now manage their own funds.

If you have been required to have a fiduciary manage your funds based on the results of the VA’s mandatory Compensation & Pension Exam, getting a second opinion from a private doctor may help you challenge the appointment of the fiduciary. If a private doctor determines that you are physically and mentally capable of managing your own money, the VA may consider their decision regarding your VA claim.

When a private doctor evaluates your condition for the sake of your disability claim, it is known as an independent medical examination (IME). The IME can serve to let the VA know that while you do have a service-connected disability, a medical professional has deemed it as not being grounds for the appointment of a fiduciary. The VA may also take the results of an independent medical examination into consideration if you are already going to the board of veterans’ appeals with a different type of a decision, such as a denial of your claim.

Can I Pick my Own Fiduciary?

The VA has an order of preference in who it will appoint as a fiduciary. At the top of the list is someone selected by the Veteran. So, while the Veteran may not be able to directly choose who serves as their fiduciary, their wish does carry weight. If you want to have an influence on the decision that the VA makes regarding the appointment of your fiduciary, make sure to let the VA know your preferences.

If the Veteran does not or cannot show that they want a specific person to be the fiduciary, regulations look to the spouse, a relative caring for the Veteran, a friend or other relative who is willing to serve as fiduciary without a fee, an institution where the Veteran receives care, a court-appointed individual, or someone who demands a fee to serve as fiduciary, in that order. In this way, the VA works to keep the responsibility of being a disabled Veteran’s fiduciary within their inner circle as much as possible. However, if a fiduciary cannot be found within the veteran’s inner circle, the VA may look elsewhere. 

Once a willing fiduciary has been found, the VA Fiduciary Hub will investigate that person’s background to ensure they can serve as a fiduciary. In many cases, the fiduciary must get a surety bond before being appointed by the VA. If a person selected by the Veteran passes the background check administered by the VA, they can move on to be officially appointed the Veteran’s fiduciary. The VA performs a criminal background check to make sure that an individual is capable and responsible enough to fulfill the responsibilities of a fiduciary.

What If My Fiduciary Isn’t Doing Their Job? 

A fiduciary can be removed by the VA Fiduciary Hub if they receive credible information that the fiduciary is misusing VA funds, not performing their duty in accordance with regulations, or if the fiduciary’s required annual reporting is 120 days late. In this situation, the VA Fiduciary Hub would likely remove the fiduciary and appoint a temporary fiduciary until more permanent arrangements can be made.

If you feel that your current fiduciary is not fulfilling the requirements of their role, you can use the VA’s contact information to request a temporary character witness to take their place. This stand-in fiduciary can manage your VA funds until you find a more suitable permanent replacement.

A Veteran can also make a reasonable request to have a successor fiduciary appointed to replace the current one if:

  1. The current fiduciary is receiving a fee, and the Veteran identifies a volunteer who is higher in the order of precedence.
  2. The Veteran asks for the removal of the fiduciary in lieu of supervised direct payments.
  3. The fiduciary is not performing in the Veteran’s best interests, or the fiduciary has an unresolvable conflict with the Veteran. If you have a personal relationship with your fiduciary and that relationship is tested or severed, that person may no longer be able to fulfill their responsibilities as your fiduciary. In circumstances like these, it can be somewhat risky to have someone you are close to as your fiduciary.

The appointment of a fiduciary can be a difficult and complex issue. However, it is important to make sure you have a responsible, trustworthy individual acting as your fiduciary. If you have any qualms about the person who is currently managing your VA funds, it may be wise to find someone else for the job.

While your first choice of a person to manage your VA funds might be your spouse, appointing your husband or wife to be your fiduciary may not be an ideal choice. While having a spouse serve as your fiduciary can be perfectly acceptable in some cases, it can sometimes cause a conflict of interest. It may be helpful to find a fiduciary who is close enough to you to understand your situation fully, but not so close that their responsibilities might interfere with your relationship with them.

In addition, you can appoint a professional financial advisor to be your fiduciary if you believe that this is the best choice for you. The VA will still need to approve your decision regardless of who you choose as your fiduciary, but they are likely to look favorably upon anyone who has the credentials and experience to properly manage your money. However, it’s important to note that you will have to pay a financial professional to be your fiduciary in the majority of cases. Friends and family members, on the other hand, may fulfill this responsibility free of charge. 

If you need help choosing the most eligible person to manage your VA funds, it may be helpful to speak to your attorney. A legal professional can provide insight into who is most fit to be your fiduciary. If you need legal representation for any VA-related issues, contact us today.

Written By Josef Loukota

Josef Loukota is a VA disability attorney that fights to help fellow Veterans receive the disability benefits they earned. Joe served for six years in the U.S. Navy as an aircraft safety equipment mechanic and shop supervisor. He earned the Enlisted Aviation Warfare Specialist insignia, two Navy Achievement Medals, and the Navy Good Conduct Medal. Prior to joining Berry Law, Joe worked with Legal Aid of Nebraska as part of a Veteran-to-farmer outreach program. Joe also worked at the University of Nebraska at Omaha Military and Veteran Services Office as part of a team helping Veterans access their G.I. Bill education benefits.

Sources:

https://www.nami.org/learn-more/mental-health-conditions

https://www.benefits.va.gov/fiduciary/contact-us.asp

https://www.nerdwallet.com/article/investing/fiduciary