Citation Nr: 1302827 Decision Date: 01/25/13 Archive Date: 01/31/13 DOCKET NO. 10-13 785A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Waco, Texas THE ISSUE Whether the appellant's net worth is excessive for purposes of receiving nonservice-connected VA death pension benefits. REPRESENTATION Appellant represented by: Texas Veterans Commission ATTORNEY FOR THE BOARD Elizabeth Jalley, Counsel INTRODUCTION The Veteran served on active duty from February 1943 to August 1943. He died in February 2009. The appellant is his surviving spouse. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an April 2009 administrative decision of the Department of Veterans Affairs (VA) Regional Office (RO) and Pension Management Center in St. Paul, Minnesota. The April 2009 administrative decision initially denied the appellant's claim of entitlement to nonservice-connected death pension benefits because she was determined not to have met any of the eligibility criteria to be considered a surviving spouse for purposes of nonservice-connected death pension benefits under 38 C.F.R. §§ 3.50, 3.52 (2012). Specifically, even though she was the Veteran's surviving spouse, they had been married for less than one year before his death. The March 2010 statement of the case reflects that, based on information that was submitted by the appellant following the April 2009 decision, VA was able to confirm the appellant's relationship with the Veteran. Because she has been deemed to satisfy the regulatory criteria to be considered the Veteran's surviving spouse for death pension purposes, that issue has become moot. The remaining question is whether the appellant's net worth is excessive for purposes of receiving nonservice-connected VA death pension benefits. On her April 2010 substantive appeal form, the appellant requested that she be scheduled for a hearing at a local VA office before a Member of the Board. The appellant was scheduled for a November 2012 hearing, and was sent notice of this hearing in September 2012. In November 2012, prior to the hearing date, the appellant withdrew her hearing request in writing. The hearing request has therefore been withdrawn, and no further action regarding a hearing is necessary. FINDINGS OF FACT 1. The appellant was born in August 1946. 2. At the time the appellant filed her claim, the corpus of her estate consisted of a bank deposit worth $169,000, and approximately $69 per month in benefits from the Social Security Administration (SSA). 3. At the time the appellant filed her claim, her estimated expenses totaled $839.00 per month. 4. In March 2010, the appellant's life expectancy for net worth determinations was 17.8 years. 5. In March 2010, it was estimated that, at the current rate of income and expenses, the appellant's net worth would be exhausted after 18.2 years. 6. It is reasonable for the appellant to consume some part of her net worth for her maintenance. CONCLUSION OF LAW The corpus of the appellant's estate precludes the payment of nonservice-connected death pension benefits. 38 U.S.C.A. §§ 1503 , 1541, 1542, 5103A (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.2 , 3.3, 3.23, 3.271, 3.272, 3.274, 3.275 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duties to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA), Public Law No. 106-475, 114 Stat. 2096 (2000), substantially amended the provisions of chapter 51 of title 38 of the United States Code, concerning the notice and assistance to be afforded to claimants in substantiating their claims. VCAA § 3(a), 114 Stat. 2096, 2096-97 (2000) (now codified as amended at 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2012)). In addition, VA published regulations, which were created for the purpose of implementing many of the provisions of VCAA. See 66 Fed. Reg. 45,620 (Aug. 29, 2001) (now codified, in pertinent part, at 38 C.F.R. § 3.159 (2012)). The notice requirements of the VCAA require VA to notify the appellant of any evidence that is necessary to substantiate a claim, as well as the evidence VA will attempt to obtain and which evidence the appellant is responsible for providing. Quartuccio v. Principi, 16 Vet. App. 183 (2002). Such notice must be provided to a claimant before the initial unfavorable decision on a claim for VA benefits by the agency of original jurisdiction. Id; see also Pelegrini v. Principi, 18 Vet. App. 112 (2004). The VCAA notice requirements, however, may be satisfied if any errors in the timing or content of such notice are not prejudicial to the claimant. See Dingess, supra; Pelegrini, supra. In this case, the Board finds that a VCAA letter dated in January 2010 satisfied the notice requirements of the VCAA. The letter advised the appellant how to substantiate her claim for a death pension, and it advised her as to both her and VA's responsibilities. Specifically, VA notified the appellant that it needed to verify her earned income from interest and/or dividends, and that it required additional information concerning her expenses. This letter provided specific instruction on how to furnish VA with this information. In response to this letter, the appellant submitted a copy of the form detailing her expenses, but she did not submit any statements from her financial institution. With regard to VA's duty to assist, the Board notes that the appellant has not identified any outstanding records for VA to obtain. Therefore, the Board finds that VA's duty to assist in this regard has been satisfied. The evidence of record provides sufficient information to adequately evaluate the claim. Therefore, no further assistance to the appellant with the development of evidence is required, nor is there notice delay or deficiency resulting in any prejudice to the appellant. 38 U.S.C.A. § 5103A(a)(2); 38 C.F.R. § 3.159(d); see Mayfield v. Nicholson, 19 Vet. App. 103 (2005), rev'd on other grounds, 444 F.3d 1328 (Fed. Cir. 2006). II. Death Pension Death pension benefits are available to a veteran's surviving spouse as a result of the veteran's nonservice-connected death. Basic entitlement exists if (i) the veteran served for 90 days or more during a period of war; or (ii) was, at the time of death, receiving or entitled to receive compensation or retirement pay for a service-connected disability, and (iii) the surviving spouse meets the net worth requirements of 38 C.F.R. § 3.274 and has an annual income not in excess of the maximum annual pension rate specified in 38 C.F.R. §§ 3.23 and 3.24. 38 U.S.C.A. §§ 101(8), 1521(j), 1541(a); 38 C.F.R. § 3.3(b)(4). In this case, the Veteran had the required wartime service, having served more than 90 days during World War II. Accordingly, the Veteran's service renders his surviving spouse eligible for death pension benefits. The issue on appeal centers on whether the appellant's net worth is excessive for purposes of qualifying for VA death pension benefits. Pension payable to a surviving spouse shall be denied or discontinued when the corpus of the estate of the surviving spouse is such that under all the circumstances, including consideration of the surviving spouse's income and the income of any child for whom the surviving spouse is receiving pension, it is reasonable that some part of the corpus of the estate be consumed for the surviving spouse's maintenance. 38 U.S.C.A. § 1541, 1543; 38 C.F.R. § 3.274(c). The terms 'corpus of estate' and 'net worth' mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant, except the claimant's dwelling (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the claimant's reasonable mode of life. 38 C.F.R. § 3.275(b). In determining whether the estate should have been used for the appellant's maintenance, factors to be considered include: whether the property can be readily converted into cash at no substantial sacrifice; life expectancy; number of dependents; and potential rate of depletion, including unusual medical expenses. 38 C.F.R. § 3.275(d). In determining annual income, all payments of any kind or from any source (including salary, retirement or annuity payments, or similar income, which has been waived) shall be included except for listed exclusions. See 38 U.S.C.A. § 1503(a); see also 38 C.F.R. § 3.271(a). Social Security benefits are not specifically excluded under 38 C.F.R. § 3.272; such income is therefore included as countable income. Medical expenses in excess of five percent of the maximum income rate allowable, which have been paid, may be excluded from an individual's income for the same 12-month period, to the extent they were paid. 38 C.F.R. § 3.272(g)(1)(iii). The Board notes that VA's pension program is intended to give beneficiaries a minimum level of financial security; it is not intended to protect substantial assets or build up the beneficiary's estate for the benefit of heirs. Pension entitlement is based on need and that need does not exist if a claimant's estate is of such size that he/she could use it for living expenses. The basic issue in evaluating net worth is to determine whether or not the claimant's financial resources are sufficient to meet the claimant's basic needs without assistance from VA. Thus, if net worth is a factor for the benefit claimed, VA should consider if it is reasonable, under all the circumstances, for the claimant to consume some of his/her estate for maintenance. If a claimant's assets are sufficiently large that the claimant could live off of these assets for a reasonable period of time, pension should be denied for excessive net worth. If net worth is later depleted, the claimant can reopen the pension claim. There are no precise guidelines, however, which establish what size estate would preclude the payment of pension. What constitutes excessive net worth is a question of fact for resolution after considering the facts and circumstances in each case. See VA Adjudication Procedure Manual, M21-1MR, Part V, Subpart iii, Chapter 1, Section J, Topic 67, Blocks g, h (February 13, 2007). See also M21-1MR, Part V, Subpart iii, Chapter 1, Section J, Topic 70, Block a (February 13, 2007). At the time the appellant filed her claim, she reported assets of $193,000 in cash, bank accounts, or certificates of deposit (CDs). She reported no IRAs, Keogh Plans, stocks, bonds, mutual funds, value of business assets, real property other than her home, or any other property. An SSA inquiry revealed that she was being paid $69 per month at the time of her claim, and the appellant estimated that her expenses totaled approximately $839 per month at that time. Thus, her net monthly expenses were approximately $770. At that rate, her spending would be exhausted after approximately 18.2 years. The March 2010 "Corpus of Estate Determination," notes that the appellant's life expectancy was 17.8 years. See also M21-1MR, Part V, Subpart iii, Chapter 1, Section J, Topic 70, Block a (February 13, 2007). As indicated above, size and liquidity of net worth, family income, life expectancy, and the potential rate of depletion are considered in a net worth determination. At her current rate of spending, the projected rate of depletion of the appellant's net worth of $193,000 exceeds her life expectancy. The evidence indicates that this property can be readily converted into cash at no substantial sacrifice. The appellant has no dependents and, with respect to her medical expenses, has reported that she receives all of her medical care in Mexico because it is more affordable. As noted above, the standard by which the Board is to determine whether the net worth can be consumed to provide for maintenance is one of reasonableness. While there may be some depletion of the appellant's financial resources, the Board emphasizes that the purpose of VA pension benefits is to give beneficiaries a minimum level of financial security. They are not intended to protect substantial assets, subsidize discretionary spending, or build up the beneficiary's estate. The Board recognizes the appellant's sincere belief that she needs and is entitled to death pension benefits. Given her net worth detailed above, however, the Board finds that some portion of the corpus of her estate may reasonably be consumed in order to provide for her maintenance. 38 U.S.C.A. § 1522(a) ; 38 C.F.R. § 3.274(a). The Board emphasizes that, if her net worth becomes significantly depleted in the future, or there is a substantial increase in necessary out-of-pocket medical expenses, the appellant is encouraged to again file a claim for pension benefits and submit the appropriate financial documentation in support of that claim. Under the circumstances and the facts as presented regarding the appellant's net worth at the present time, however, her assets are sufficient to meet her needs for the foreseeable future. In light of the above, the Board finds that, at present, the appellant does not meet the net worth eligibility requirement for pension benefits. The Board has considered the doctrine of reasonable doubt. In this case, however, the preponderance of the evidence is against the claim, and the benefit-of-the-doubt doctrine does not apply. 38 U.S.C.A. § 5107(b); Gilbert v. Derwinski, 1 Vet. App. 49 (1990). Pension benefits are thereby precluded, and the appellant's claim for VA nonservice-connected death pension benefits must be denied. 38 U.S.C.A. §§ 1503, 1541, 1542, 5103A; 38 C.F.R. §§ 3.2 , 3.3, 3.23, 3.271, 3.272, 3.274, 3.275. ORDER The appellant's net worth is excessive for purposes of receiving nonservice-connected VA death pension benefits. The appeal is denied. ____________________________________________ WAYNE M. BRAEUER Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs