Citation Nr: 1757076 Decision Date: 12/11/17 Archive Date: 12/20/17 DOCKET NO. 14-03 189 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Paul, Minnesota THE ISSUE Entitlement to special monthly death pension benefits based on the need for regular aid and attendance for purposes of accrued benefits. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD P.S. Rubin, Counsel INTRODUCTION The Veteran had active military service in the United States Army from December 1940 to August 1943. He died in November 2005. In a June 2010 rating decision, the Veteran's surviving spouse was granted special monthly death pension benefits based on the need for regular aid and attendance. However, she died in October 2010 before any benefits were paid to her. The appellant is the son of the surviving spouse and the Veteran. In August 2011, he filed a claim for accrued benefits. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a May 2013 decision issued by the Department of Veterans Affairs (VA) Regional Office (RO) and Pension Management Center (PMC) in St. Paul, Minnesota, which denied the appellant's claim for accrued benefits. The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ). VA will notify the appellant if further action is required. REMAND Death pension is available to the surviving spouse of a veteran because of his nonservice-connected death, as long as the veteran served for the required period of time during wartime subject to certain income limitations. See 38 U.S.C. §§ 101, 1541 (2012); 38 C.F.R. §§ 3.23, 3.3(b)(4) (2017). Moreover, increased death pension benefits are payable if the surviving spouse is in need of regular aid and attendance or is housebound. 38 U.S.C. § 1541(d), (e); 38 C.F.R. §§ 3.23(a)(6)-(7), 3.351(a)(5), 3.352. In a June 2010 rating decision, the Veteran's surviving spouse (the appellant's mother) was awarded special monthly death pension benefits based on her need for regular aid and attendance. See 38 U.S.C. § 1541(d). This award was effective from October 13, 2009. However, in the same June 2010 rating decision, the RO issued a proposed finding of incompetency for the surviving spouse prior to any payment being made for the pension benefits awarded. The proposal for incompetency was based on the findings of a private physician. See February 2010 VA Form 21-2680 (Examination for Housebound Status or Permanent Need for Regular Aid and Attendance). Under VA regulations, a mentally incompetent person is one who because of injury or disease lacks the mental capacity to contract or to manage his own affairs, including disbursement of funds without limitation. 38 C.F.R. § 3.353(a). The RO has the sole authority to make official determinations of competency and incompetency for the purpose of, among other things, disbursement of benefits. 38 C.F.R. § 3.353(b); see also 38 C.F.R. §§ 13.55, 13.56, 13.57 (outlining the regulations pertaining to direct payment and the appointment of fiduciaries). The RO's award of special monthly death pension benefits in the June 2010 rating decision was withheld and not paid to the surviving spouse pending the outcome of a final finding of incompetency and appointment of a fiduciary for her. The surviving spouse was given 60 days from the date of the proposed June 2010 rating decision to submit any evidence or argument on the issue of incompetency. See 38 C.F.R. § 3.103(b); VBA Live Manual M21-1, III.iv.8.A.3.b. (May 23, 2017). Unfortunately, the surviving spouse died in October 2010 before the RO was able to issue a final finding of incompetency and appointment of a fiduciary. Therefore, the RO did not release any of the funds in connection with her special monthly death pension benefits award. On appeal, the appellant (the Veteran's son) seeks to recover amounts due, but unpaid, to his mother at the time of her death in October 2010. The appellant has noted that, prior to her death, the Veteran's surviving spouse informed VA in a July 2010 letter that she agreed with the proposal for incompetency and wanted the appellant, her son, to be named as the fiduciary of her VA funds. The appellant has asserted that he should be awarded accrued benefits from the surviving spouse's special monthly death pension award in order to pay her outstanding assisted living bill in the amount of $10,812.79 - i.e., her expenses of last sickness. See August 2011 VA Form 21-601 (Application for Accrued Amounts Due to a Deceased Beneficiary). Accrued benefits are defined as periodic monetary benefits authorized under law administered by VA to which a payee was entitled at his or her death under existing ratings or decisions or those based on evidence in the file at the date of death and are due and unpaid. 38 U.S.C. § 5121(a); 38 C.F.R. 3.1000(a); Ralston v. West, 13 Vet. App. 108, 113 (1999). Applications for accrued benefits must be filed within one year after the date of death. 38 U.S.C.A. § 5121 (c); 38 C.F.R. § 3.1000(c). In the present case, the appellant's application for accrued benefits was timely filed in August 2011, within one year of the surviving spouse's October 2010 death. Upon the death of a surviving spouse or remarried surviving spouse, accrued benefits are paid to the veteran's children. 38 U.S.C. § 5121(a)(3); 38 C.F.R. § 3.1000(a)(2). The term "child" is defined, in pertinent part, as an unmarried person who is a legitimate child of the veteran and (i) who is under the age of 18 years; or (ii) who, before reaching the age of 18 years, became permanently incapable of self-support; or (iii) who, after reaching the age of 18 years and until completion of education or training (but not after reaching the age of 23 years) is pursuing a course of instruction at an educational institution approved by the Department of Veterans Affairs. See 38 C.F.R. §§ 3.57(a), 3.1000(d)(2). In the present case, the appellant does not qualify as a "child" for VA purposes, as he was 58 years old at the time of his mother's death in October 2010. Nevertheless, in all other cases, accrued benefits may be paid as necessary to reimburse the person who bore the expense of last sickness and burial. 38 U.S.C. § 5121(a)(6); 38 C.F.R. § 3.1000(a)(5). The Board emphasizes this is the provision that is central to the outcome of the present appeal. In the May 2013 decision on appeal and August 2013 Statement of the Case (SOC), the RO denied the appellant's accrued benefits claim on the basis that he failed to provide proof of payment for expenses from his own funds for the surviving spouse's last illness or burial. The RO explained that a beneficiary of accrued benefits must be someone who paid all or part of the expenses of a surviving spouse's last illness or burial. A beneficiary of accrued benefits can receive reimbursement of expenses that he actually paid, limited to the amount of special monthly death pension benefits payable to the surviving spouse before her passing. Accompanying his June 2013 notice of disagreement (NOD), the appellant submitted an October 2010 invoice from Salem Lutheran Assisted Living Home in the amount of $10,812.79. However, he indicated that he had not paid this invoice. Instead, he was waiting for VA to name him fiduciary on the basis of the surviving spouse's incompetence and award him the accrued benefits, so that he could pay the invoice in the amount of $10,812.79. See June 2013 NOD; March 2017 Appellate Brief. The Board notes that the resulting invoice from the surviving spouse's assisted living facility stay before her death could cover the time period of her "last illness." In this regard, the VBA Live Manual specifies that, if death resulted from a lingering or prolonged illness rather than an acute attack, the period of "last illness" is considered to have begun at the time the person became so ill as to require the regular and daily attendance of another person. Generally, expenses incurred more than one year prior to date of death should not be considered expenses of last illness. See M21-1, V.iii.1.G.6.b. (September 29, 2016). However, before addressing the merits of the appellant's accrued benefits claim, the Board finds that additional development of the evidence is required. First, the VBA Live Manual permits reimbursement not only to a claimant who paid the expenses of the last illness and burial of the deceased beneficiary, but also to a claimant who "is held responsible by the unpaid creditors for the payment of the deceased beneficiary's bills." See M21-1, VIII.5.11.b. (March 1, 2006). Therefore, if the appellant can establish that he is legally responsible to the unpaid creditor (the assisted living facility) for the payment of the outstanding $10,812.79, then he may have standing to qualify for accrued benefits under VA law. At present, the appellant's legal responsibility to pay this invoice has not been established. In fact, the October 2010 invoice from the assisted living facility in the amount of $10,812.79 was addressed and mailed to S.M., but not to the appellant. As such, a remand is required for the AOJ to ask the appellant to submit proof that he is being held legally responsible by the unpaid creditor (Salem Lutheran Assisted Living Home) for the $10,812.79 listed in the invoice. Second, the claims file confirms that the appellant did pay the burial expenses of the surviving spouse to a funeral home in the amount of $3,724.29. Specifically, the appellant submitted an October 2010 invoice from the funeral home, along with a copy of a check payable to the funeral home in the amount of $3,724.29. See funeral bill/expenses tab on Virtual VA with a date of receipt of November 29, 2010. This amount paid was from a checking account jointly held by the appellant and the surviving spouse at Wells Fargo Bank. In this regard, the VBA Live Manual states "[i]f the expenses of the last illness, burial, funeral, and transportation of the deceased beneficiary are paid from an account held jointly by the claimant and the decedent with the 'right of survivorship,' consider that account to be the personal funds of the claimant. In any case in which conflicting evidence is of record as to whether the account was held jointly with the right of survivorship, resolve the conflict by requiring the claimant to furnish a statement from an official of the bank." See M21-1, VIII.5.16.b. (June 4, 2004). Therefore, if the appellant and surviving spouse's joint checking account in question was titled "jointly held with the right of survivorship," then the AOJ should have reimbursed the appellant for the burial expenses that he paid from this account in the amount of $3,724.29. As such, a remand is required for the AOJ to ask the appellant to furnish a statement from an official of Wells Fargo Bank, establishing that the checking account in question was held "jointly with the right of survivorship." Accordingly, the case is REMANDED for the following action: 1. The AOJ should ask the appellant to submit proof that he is being held legally responsible by the unpaid creditor (Salem Lutheran Assisted Living Home) for the $10,812.79 listed in their invoice. (These are the last illness expenses of the appellant's mother). The AOJ is advised the VBA Live Manual permits reimbursement not only to a claimant who paid the expenses of the last illness and burial of the deceased beneficiary, but also to a claimant who "is held responsible by the unpaid creditors for the payment of the deceased beneficiary's bills." See M21-1, VIII.5.11.b. (March 1, 2006). The AOJ is also advised that, if the appellant can establish that he is legally responsible to the "unpaid creditor" (the assisted living facility) for the payment of the outstanding $10,812.79, then he may have standing to qualify for accrued benefits under VA law. However, at present, the appellant's legal responsibility to pay this invoice has not been established in the present case. In fact, the October 2010 invoice from the assisted living facility in the amount of $10,812.79 was addressed and mailed to S.M., but not to the appellant. 2. The AOJ should ask the appellant to furnish a statement from an official at Wells Fargo Bank, establishing that the checking account jointly held by the appellant and the surviving spouse prior to her death, was titled "jointly with the right of survivorship." (The appellant paid the burial expenses of the surviving spouse to the funeral home in the amount of $3,724.29 from this joint checking account). The AOJ is advised that the VBA Live Manual states "[i]f the expenses of the last illness, burial, funeral, and transportation of the deceased beneficiary are paid from an account held jointly by the claimant and the decedent with the 'right of survivorship,' consider that account to be the personal funds of the claimant. In any case in which conflicting evidence is of record as to whether the account was held jointly with the right of survivorship, resolve the conflict by requiring the claimant to furnish a statement from an official of the bank." See M21-1, VIII.5.16.b. (June 4, 2004). Therefore, if proof is submitted that the appellant and surviving spouse's joint checking account in question was held "jointly with the right of survivorship," then the AOJ should reimburse the appellant for the burial expenses that he paid from this account in the amount of $3,724.29. 3. After completing the above actions and any other development as may be indicated as a consequence of the actions taken in the preceding paragraphs, the case should be readjudicated by the AOJ on the basis of additional evidence. If the benefits sought are not granted, the Veteran and his representative should be furnished a supplemental statement of the case and be afforded a reasonable opportunity to respond before the record is returned to the Board for further review. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C. §§ 5109B, 7112 (2012). _________________________________________________ J.W. ZISSIMOS Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C. § 7252 (2012), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2017).