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M21-1, Part III, Subpart v, Chapter 9, Section A – General Information on Incompetency and Fiduciary Cases

Overview


In This Section

This section contains the following topics:
Topic Topic Name

1

Requesting the Appointment (Certification) of a Fiduciary

2

Suspending Beneficiary Payments Pending the Development of an Incompetency Issue or the Appointment or Change of a Fiduciary

3

Notifying the Insurance Center of Changes in a Beneficiary’s Competency Status and/or Fiduciary

1.  Requesting the Appointment (Certification) of a Fiduciary


Introduction

This topic provides information on the authorization activity’s responsibility for requesting the appointment of a fiduciary in some cases involving incompetent and minor beneficiaries, including


Change Date

October 3, 2017

III.v.9.A.1.a.  Circumstances Under Which It Is Appropriate to Request the Appointment (Certification) of a Fiduciary

Request the appointment (certification) of a fiduciary when benefits are payable to a beneficiary who is

  • rated incompetent by the Department of Veterans Affairs (VA)
  • under legal disability, or
  • a minor.
This includes Veterans rated incompetent who are receiving hospital, nursing home, or domiciliary care by VA.
Exception:  Do not request the appointment of a fiduciary when a child is in the custody of a natural or adoptive parent or stepparent.  In this case, recognize the parent as the custodian, per 38 CFR 3.850(c), by following the procedures in M21-1, Part III, Subpart v, 9.C.4.
Notes:
  • In most cases, fiduciary hubs are responsible for requesting the appointment of a fiduciary.  Regional offices (ROs) must use VA Form 21-592Request for Appointment of a Fiduciary, Custodian, or Guardian, to request the appointment of a fiduciary when
    • VA is processing an incompetent beneficiary’s claim through the Integrated Disability Evaluation System (IDES)
    • a Restricted Access Claims Center (RACC) has jurisdiction over an incompetent beneficiary’s claim
    • VA is processing an incompetent beneficiary’s claim with an attorney fee agreement, or
    • VA is processing a foreign incompetent beneficiary’s claim.
  • The definition of the terms “appointment” and “certification” are essentially the same for the purposes of this section.  (The “certification” is the signature on the VA Form 21-555, Certificate of Legal Capacity to Receive and Disburse Benefits.)

References:  For more information on


III.v.9.A.1.b.  Requesting Appointment of a Fiduciary for Insurance Proceeds

Request the appointment of a fiduciary for the purpose of paying VA insurance proceeds, despite the existence of a payee or potential payee not otherwise requiring fiduciary hub certification.
Example:  A fiduciary must be certified for a minor child entitled to insurance payments, regardless of any payment of pension or Dependency and Indemnity Compensation benefits under 38 CFR 3.850(c).
Reference:  For more information on VA insurance proceeds, see M21-1, Part III, Subpart vi, 8.6.f.

III.v.9.A.1.c.  Preparing VA Form 21-592 to Request the Appointment of a Fiduciary

In order to prepare VA Form 21-592 for review and action by a fiduciary hub,
  • establish an end product (EP) 290 – FID – Fiduciary Adjustment
  • populate all applicable fields on the VA Form 21-592
  • upload a portable document format (PDF) version of the completed VA Form 21-592 to the beneficiary’s electronic claims folder (eFolder), and
  • transfer the EP 290 to the fiduciary hub of jurisdiction.
Note:  When completing VA Form 21-592,
  • to the extent possible, use street addresses, not U.S. Post Office box numbers, to respond to Items 7, 9, 14A, 15A, and 19, and
  • sign Item 24 in the following format:  [preparer’s Local Area Network identification (LAN ID)] for VSCM.  (Example:  VSCJSMIT for VSCM).
References:  For more information on

III.v.9.A.1.d.  Fiduciary Hub Jurisdictions and Contact Information

Use the table below to determine the jurisdiction and contact information for VA’s fiduciary hubs.

Important:  In order to determine and identify the correct fiduciary hub of jurisdiction, consider the place of residence of the

  • minor or incompetent beneficiary for initial appointment of a fiduciary, or
  • fiduciary, once one has been appointed.
If the beneficiary/fiduciary resides in … Then the fiduciary hub of jurisdiction is …
  • Florida
  • Georgia
  • North Carolina, or
  • South Carolina
Columbia Fiduciary Hub
P.O. Box 9367
Columbia, SC  29209-9998
1-888-407-0144, #1
VA e-mail:
  • Connecticut
  • Delaware
  • Indiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • New Hampshire
  • New Jersey
  • New York
  • Ohio
  • Pennsylvania
  • Rhode Island
  • Vermont, or
  • any foreign country except the Caribbean, Mexico, and Central and South America
Indianapolis Fiduciary Hub
P.O. Box 441480
Indianapolis, IN  46244
1-888-407-0144, #2
VA e-mail:
  • Kansas
  • Nebraska
  • North Dakota
  • Oklahoma
  • South Dakota
  • Texas
  • the Caribbean
  • Mexico, or
  • Central and South America
Lincoln Fiduciary Hub
P.O. Box 85817
Lincoln, NE  68501-5817
1-888-407-0144, #3
VA e-mail:
  • Alabama
  • Kentucky
  • Mississippi
  • Virginia
  • Tennessee
  • Washington, DC
  • West Virginia, or
  • Puerto Rico
Louisville Fiduciary Hub
P.O. Box 3487
Louisville, KY  40201
1-888-407-0144, #4
VA e-mail:
Republic of the Philippines
Manila Fiduciary Activity
1501 Roxas Boulevard
Pasay City, PI  1302
VA e-mail:
  • Arkansas
  • Illinois
  • Iowa
  • Louisiana
  • Minnesota
  • Missouri, or
  • Wisconsin
Milwaukee Fiduciary Hub
P.O. Box 14975
Milwaukee, WI  53214-0975
1-888-407-0144, #5
VA e-mail:
  • Alaska
  • Arizona
  • California
  • Colorado
  • Hawaii
  • Idaho
  • Montana
  • Nevada
  • New Mexico
  • Oregon
  • Utah
  • Washington, or
  • Wyoming
Salt Lake City Fiduciary Hub
P.O. Box 58086
Salt Lake City, UT  84158
1-888-407-0144, #6
VA e-mail:

III.v.9.A.1.e.  Referring Status Inquiries After Uploading VA Form 21-592

After uploading VA Form 21-592 for review and action by the fiduciary hub of jurisdiction, refer inquiries regarding the status of the corresponding case to the same fiduciary hub.  It is the responsibility of fiduciary hubs to respond to such inquiries.

III.v.9.A.1.f.  Requesting a Temporary Fiduciary While a Determination of Incompetence Is Being Made or Appealed

Fiduciary hubs have authority under 38 U.S.C. 5507(d) to appoint a temporary fiduciary to protect the VA benefit payments of a beneficiary while a determination of competency is being made or appealed.  VA may appoint a temporary fiduciary only when there is clear evidence

  • the beneficiary’s VA funds are being misused, or
  • the beneficiary is unable or unwilling to use the funds for urgent needs.
Note:  The fiduciary hub’s authorization activity is responsible for processing requests for temporary fiduciaries, but there are exceptions when ROs bear the responsibility for requesting a temporary fiduciary.
Reference:  For more information about the appointment of temporary fiduciaries, see the Fiduciary Program Manual.

III.v.9.A.1.g.  Award Adjustment and Control of a Temporary Fiduciary Appointment

A temporary fiduciary appointment may not exceed 120 days.  The following table describes a procedure for preparation and control of the payment to a temporary fiduciary that will limit payment to no more than four months.
Situation Action
VA Form 21-555, appointing a temporary fiduciary, is received by a fiduciary hub’s authorization activity.  The fiduciary hub identifies the

  • name of the temporary fiduciary
  • address of the temporary fiduciary
  • duration of appointment, if less than 120 days, and
  • the monthly amount to be paid.

Note:  The Fiduciary Hub Manager or higher-level official must sign VA Form 21-555 when appointing a temporary fiduciary.

The authorization activity requests finance activity to input a deduction code 63C.

After the finance activity inputs deduction code 63C, as described in the next row of this table, the authorization activity prepares an amended award under EP 290 that

  • reflects the claimant’s (not the fiduciary’s) name and address
  • withholds all benefits, except the amount payable to the temporary fiduciary, effective from first of the month following the month for which VA last paid the beneficiary (to avoid creating an overpayment), and
  • removes the withholding and restores full benefits as direct payment to the claimant effective from the first day of the month following the fourth month of the withholding.

Important:  The award action just described must be authorized no later than the last processing cycle of the month in which the award is effective, using fiscal adjustment (FISA) code 2.

The authorization activity establishes a future EP 291 with a suspense date that is 90 days in the future.  When the suspense date expires, the authorization activity

  • checks for receipt of a new VA Form 21-555, and
  • pays withheld benefits to either the claimant or the new fiduciary.

Reference:  For more information on fiscal authorization transactions, see M21-1, Part III, Subpart vi, 2.B.

The finance activity receives the authorization activity’s request to input a 63C deduction code. The finance activity

  • inputs a transaction to establish the deduction code 63C
  • issues a monthly payment to the temporary fiduciary identified on the VA Form 21-555
    • using funds available from the amended award, and
    • offsetting the 63C deduction balance, and
  • notifies the authorization activity of the completed transaction so that award action may be taken.

Note:  The deduction code 63C is input reflecting the gross amount payable to the temporary fiduciary for the entire period of the temporary appointment.  The amount payable each month on the amended award is captured by the deduction, reducing the gross amount of the deduction until the balance is recovered.  Then the deduction code 63C is automatically eliminated and the award resumes payment to the designated payee.

References:  For more information about

III.v.9.A.1.h.  Action to Take Following Payment to a Temporary Fiduciary

The fiduciary hub is responsible for determining the disposition of a claimant’s benefits following payment to a temporary fiduciary.

If the fiduciary hub …

Then the authorization activity must …

  • appoints a new, permanent fiduciary, or
  • determines direct payment should be made beforethe expiration of the temporary fiduciary appointment
  • ask finance activity to terminate the 63C deduction, and
  • amend the claimant’s award to
    • pay the new fiduciary or the beneficiary, and
    • restore the full rate of payment and any withheld benefits (except the amount paid to the temporary fiduciary).
  • appoints a new, permanent fiduciary, or
  • determines direct payment should be made afterthe expiration of the temporary fiduciary appointment
amend the claimant’s award to restore the previously withheld benefits (except the amount paid to the temporary fiduciary).

III.v.9.A.1.i.  Example:  Processing an Award for Appointment of a Temporary Fiduciary

The following example describes a procedure that provides for

  • payment to a temporary fiduciary, and
  • control for adjustment of a beneficiary’s award after the appointment of the temporary fiduciary expires.

Scenario:

  • VA was paying a gross monthly rate of $900 to a beneficiary’s fiduciary.
  • A fiduciary hub’s authorization activity receives a VA Form 21-555 on March 25 that reflects the appointment of a temporary fiduciary and requests the payment of $200 per month to the temporary fiduciary, pending appointment of a new, permanent fiduciary.
  • The authorization activity asks finance activity to establish a 63C deduction code with a balance of $800 ($200 per month not to exceed four months).
  • The authorization activity prepares an amended award on April 5 that reflects the Veteran’s name and address in the payee field and a payment status of supervised direct pay.

Results:

  • The award withholds $700 using a withholding code 1 and pays $200 effective April 1.
  • The award includes a future rate line that eliminates the withholding and pays the full $900 effective August 1.
  • Each month the deduction code 63C causes the $200 payment to be captured and applied toward reducing the 63C balance.
  • The finance activity releases a payment of $200 to the temporary fiduciary designated on the VA Form 21-555.

Note:  Upon receipt of a VA Form 21-555 that reflects the appointment of a permanent fiduciary, the authorization activity must generate an amended award that

  • is effective the date benefits were withheld, and
  • eliminates the withholding and pays benefits at the full rate to which the beneficiary is otherwise entitled.  (This action will release the previously withheld benefits to the new fiduciary.)

III.v.9.A.1.j.  Restricting Notification to Anyone Outside VA of a Pending Request for Fiduciary Appointment

Do not notify anyone outside VA of a pending request for the appointment of a fiduciary in order to

  • avoid the unnecessary appointment of a guardian or the appointment of an unsuitable person as a guardian, and
  • enable the fiduciary hub to authorize costs incident to the appointment of a fiduciary.

III.v.9.A.1.k.  Handling  Correspondence That Is Received After the Appointment of a Fiduciary

Refer all correspondence received pertaining to the handling and use of fiduciary funds to the appropriate fiduciary hub after a(n)

  • court-appointed fiduciary has been appointed or certified by the fiduciary hub
  • spouse-payee or a custodian has been designated or qualified by the fiduciary hub, or
  • institutional award has been made.

2.  Suspending Beneficiary Payments Pending the Development of an Incompetency Issue or the Appointment or Change of a Fiduciary


Introduction

This topic provides information on authorization activity’s  responsibility, in some cases, for suspending beneficiary payments pending the development of an incompetency issue or the appointment or change of a fiduciary, including


Change Date

July 18, 2015

III.v.9.A.2.a.  Determining Whether Suspension of a Beneficiary’s Payments Is Appropriate

Do not routinely suspend direct payments to a beneficiary pending the development of an issue of incompetency or certification of a fiduciary.
If evidence indicates that a beneficiary is not receiving or is being deprived of the full benefits being paid, it is possible to
  • withhold payment, and
  • request that the fiduciary hub provide an expedited appointment of a fiduciary.

If entitlement to benefits has been established but no payment has been made or if increased benefits are payable, determine whether or not benefits should be paid directly pending fiduciary hub appointment/certification.  When making the determination, consider if delaying payment of the benefits would cause undue hardship for the beneficiary.


III.v.9.A.2.b.  System Entries When Suspending a Beneficiary’s Payments

When suspending benefit payments to a beneficiary pending the appointment or change of a fiduciary

  • select Other from the dropdown box in the DECISION field on the BASIC ELIGIBILITY tab in the appropriate award-processing system, and
  • leave the following remark regarding the suspension in the award-processing system:  Beneficiary incompetent – appointment of fiduciary pending.

Reference:  For more information on taking the actions described in this block, see the


III.v.9.A.2.c.  System Entries When Resuming Suspended Payments

When resuming suspended payments pending the appointment or change of a fiduciary, select Eligible Beneficiary from the dropdown box in the DECISION field on the BASIC ELIGIBILITY tab if payments were suspended by routine processing.
Do not enter prior net award data unless the amended award affects an adjustment prior to the first of the month following the month for which VA last paid the beneficiary.
Reference:  For more information on taking the actions described in this block, see the

3.  Notifying the Insurance Center of Changes in a Beneficiary’s Competency Status and/or Fiduciary


Introduction

This topic contains information on notifying the insurance center of changes in a beneficiary’s competency status and/or fiduciary, including


Change Date

January 25, 2016

III.v.9.A.3.a.  Fiduciary Hub Responsibility to Forward VA Form 21-555 to the Insurance Center

Fiduciary hubs are responsible for forwarding copies of completed VA Forms 21-555 to the insurance center for the insurance center’s use in updating insurance records.

III.v.9.A.3.b.  Handling Requests Initiated by the Insurance Center

For information on handling requests from the insurance center for information regarding changes in a beneficiary’s competency status and/or fiduciary, see M21-1, Part III, Subpart vi, 8.6.
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