Citation Nr: 1410137 Decision Date: 03/12/14 Archive Date: 03/20/14 DOCKET NO. 09-23 312A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Phoenix, Arizona THE ISSUE Whether the appellant's net worth constitutes a bar to payment of death pension with aid and attendance from the period from May 12, 2006, until March 14, 2007. ATTORNEY FOR THE BOARD D. Havivi, Associate Counsel INTRODUCTION The Veteran had active service from March 1944 to October 1944. The Veteran passed away in December 1984. The Veteran's wife applied for death pension in May 2006. Her daughter is now her custodian and financial fiduciary. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a rating decision from the Department of Veterans Affairs (VA) Regional Office (RO) in Phoenix, Arizona. As will be explained in detail below, although this case came up as an earlier effective date case, a review of the record reflects that the question is whether the appellant's net worth constituted a bar to payment of pension during the period from May 12, 2006, until March 13, 2007. The Board has recharacterized the issue to reflect the laws and regulations that apply. A review of the Virtual VA paperless claims processing system and the Veterans Benefits Management System reveals no additional records which are pertinent to the present appeal. FINDINGS OF FACT 1. A VA determination of net worth completed February 2, 2007 showed that the Appellant was 90 years old, with a life expectancy of 4.4 years. This determination also showed that the Appellant's monthly expenses exceeded her income by $1,896.86 which would deplete her net worth 2.67 years from the date of her claim. 2. The evidence is at least in equipoise to show that it was not reasonable that some part of the corpus of the estate of the appellant be consumed for her maintenance. CONCLUSION OF LAW The corpus of the estate of the appellant did not preclude the payment of death pension with an aid and attendance allowance and entitlement to payment for the period from May 12, 2006, until March 14, 2007, have been met. 38 U.S.C.A. §§ 5103, 5103A, 5110, 5111, 7105(b) (West 2002); 38 C.F.R. §§ 3.1, 3.31, 3.152, 3.155 3.262, 3.263, 3.274, 3.275 (2013). REASONS AND BASES FOR FINDINGS AND CONCLUSION Duties to Notify and Assist Since the rating decision that the Appellant is appealing is the one that determined the effective date, statutory notice served its purpose and its application is no longer required. Dingess v. Nicholson, 19 Vet. App. 473, 491(2006), aff'd sub nom. Hartman v. Nicholson, 483 F.3d 1311, 1315 (Fed. Cir. 2007). Additionally, as discussed in detail below, sufficient evidence is of record to grant the matter on appeal. Therefore, no further notice or development is needed with respect to this matter. Merits of the Claim The appeal was initially characterized as one for an earlier effective date. In this case, the Appellant filed a claim in May 2006 for the award of payment of nonservice-connected death pension with an aid and attendance allowance. A July 2007 rating decision granted benefits effective March 14, 2007. The appellant appealed and in the May 2009 Statement of the Case the RO indicated that the grant of pension benefits was effective May 12, 2006 (the date of the appellant's claim) but explained that payment was denied until March 14, 2007 on the basis that her net worth was too great until that date. The appellant does not contend that she is entitled to benefits prior to May 12, 2006. Rather, she seeks payment from the May 12, 2006 effective date of her grant of pension. See March 2008 statement, June 2009 Substantive Appeal and November 2011 statement; see e.g. 38 C.F.R. § 3.400(c); 3.402 (discussing the assignment of effective dates for death pension claims based upon factors such as the date of receipt of claim or date entitlement arose). Accordingly, the issue on appeal centers on whether the appellant's net worth was excessive for purposes of qualifying for VA death pension benefits for the period from May 12, 2006 to March 14, 2007. 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 appellant's claim was received in May 2006. The January 2008 rating decision that granted pension explained that although the appellant received income from Social Security, when medical expenses were excluded her countable income was $0. Accordingly, the only question is whether her net worth was excessive. 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). 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 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 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 she filed her May 2006 claim, the appellant reported a net worth of approximately $61,000. She described income in the amount of $1135, mainly in the form of Social Security benefits. She also reported dividends in the amount of $1548 for the prior year. She reported significant expenses including monthly charges of $2675 for the assisted living facility and other various medical expenses. VA received a statement from the Appellant on January 12, 2007, clarifying that the money in her bank account was from selling her home and further noting that her net worth had gone down to approximately $39,000. In February 2007, the appellant reported that her net worth was approximately $36,000 and explained she had moved to a facility with a higher level of care which cost more. An itemized expense report received in November 2011 reflects an assisted living fee of $2931.67 in January 2007, $3074.40 in February 2007 and $2798 in March 2007. A February 2007 corpus of estate determination examined the figures from the appellant's original May 2006 claim and determined that the expenses exceeded income by $1896.86 and indicated the net worth would be depleted in approximately 2.67 years. Her life expectancy was estimated to be 4.4 years. VA received a Form 21-4138 from the Appellant on March 14, 2007. The attached documents showed the Appellant's net worth at $35,547. Payment of aid and attendance started effective March 14, 2007. At the date of the original claim May 2006, the Appellant's net worth was $61,000. The RO deemed this amount too great to allow for the award of payment of death pension with an aid and attendance allowance. The Board notes that, under VA regulations, a determination regarding excessive net worth is a question of fact and no specific dollar amount can be designated as excessive net worth. The Board notes further that, under VA Manual M21-1, Part V, subpart I, Chapter 3, Section A, paragraph 4(c), a formal administrative decision is required if a claimant has an estate of at least $80,000. In the instant appeal, the appellant's net worth, at most was only some $61,000. Based in large part on the accelerating rates of expenses and depletion of the estate, the Board finds that the evidence is at least in equipoise to show that it was not reasonable that some part of the corpus of the estate be consumed for the appellant's maintenance. 38 U.S.C.A. § 1522(a); 38 C.F.R. § 3.274(a). The Board finds it significant that the February 2007 corpus of estate determination concluded that the appellant's net worth would be depleted in approximately 2.67 years, nearly half the time of her life expectancy. Additionally, at the time the determination was made, the physical and mental states of the appellant was deteriorating, such that her medical and other care expenses could only have been expected to increase over the remainder of her life. Indeed, the same month the corpus of estate determination was completed, the appellant advised VA that she had to be moved to a different assisted living facility that provided an increased level of care at a higher price. Furthermore, during the pendency of the claim, the Appellant submitted evidence demonstrating that her net worth was being depleted at a much faster rate than the corpus of estate determination anticipated. In fact, statements submitted by the appellant reflect that her net worth was depleted by approximately 1/3 in 7 months. It is clear that the cost of maintenance of the health of the appellant was likely in the near future to become overwhelming as compared to her income plus the remaining value of the estate. As such, the Board has concluded that it is unlikely that there will be any build up of the estate of the appellant during the remainder of her lifetime. The Board therefore finds that the net worth is not excessive, given the life expectancy, financial situation, rapid rate of depletion and health status of the appellant. Accordingly, net worth is not a bar to payment of death pension benefits. In reaching this determination, the benefit-of-the-doubt rule has been applied. 38 U.S.C.A. § 5107(b); see Ortiz v. Principi, 274 F.3d 1361 (Fed. Cir. 2001); Gilbert v. Derwinski, 1 Vet. App. 49 (1990). ORDER The appellant's net worth did not constitute a bar to payment and payment of death pension with an aid and attendance allowance for the period from May 12, 2006, until March 14, 2007, is granted. ____________________________________________ H. SEESEL Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs