Understanding the role of fiduciary

Fellow veterans, this week let’s discuss a topic that has become controversial within the Department of Veterans Affairs over the past few months — fiduciaries.

A fiduciary is a person or entity appointed in a representative capacity to receive monies paid under any of the laws administered by the Secretary of the Department of Veterans Affairs for the use and benefit of a veteran, their minor children or other beneficiary who has been determined to be unable to manage their financial affairs.

Generally, the VA looks for family or friends to serve as a fiduciary. When friends and family are not able to serve, VA looks for qualified individuals or organizations to serve as a fiduciary. Any individual appointed as a VA fiduciary is responsible for managing the beneficiary’s VA income and ensuring the beneficiary’s just debts are paid. Additionally, responsibilities of the fiduciary include, but are not limited to, the following:

1. Utilizing the funds for the daily needs of the beneficiary and his/her recognized dependents.

2. Never borrowing, loaning or gifting funds belonging to the beneficiary.

3. Reporting any of the following changes to the Fiduciary Activity immediately:  Change in address, phone number, income, dependents, hospitalization, incarceration or death of the beneficiary or the beneficiary’s dependents.

4. Establishing a properly titled bank account as follows: (beneficiary’s name), by (fiduciary’s name, Federal Fiduciary).

5. Never commingling the beneficiary’s funds with those of another.

6. Never withdrawing cash from the beneficiary’s account either by counter check or ATM withdrawal.

7. Obtaining prior approval for any nonrecurring expense exceeding $1,000.

8. Timely submitting periodic accountings when required.

9. Keeping accurate, complete records and receipts, regardless of any requirement to submit periodic accountings.

10. Conserving excess funds in a federally or state-insured interest bearing account or United States savings bonds.

11. Registering saving bonds to reflect proper ownership and the existence of the fiduciary relationship, as follows: (beneficiary’s name), (Social Security number), under custodianship by designation of the Department of Veterans Affairs.

12. Reporting any event that affects the beneficiary’s payment or entitlement to benefits and promptly returning any payment that the beneficiary is not due.

13. Notifying VA of any changes or circumstances that would affect your performance as a payee or your decision to continue to serve as a payee (e.g., you sell or transfer your business).

14. Returning any funds owned by the beneficiary to VA if you stop serving as the fiduciary.

15. Notifying the VA if the beneficiary’s condition improves to a point where you believe he or she no longer needs a fiduciary.

16. Protecting the beneficiary’s funds from the claims of creditors. A creditor may not legally take the beneficiary’s funds from you as they are protected by law. 

If you feel that you need to be appointed as a fiduciary, the VA will require an assessment of your qualifications, this includes but is not limited to:  The willingness to serve and abide by all agreements; an interview with a VA representative; a review of the credit report; an inquiry into the criminal background; and interviews with character witnesses.

The above are simplified guidelines. Call me for additional information or to set up an appointment, 541-962-8802.  I am located at the Center for Human Development, 2301 Cove Ave., La Grande.

Byron Whipple is the Union County veterans service officer.