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M21-1, Part III, Subpart v, Chapter 9, Section C – Authorizing Awards for Fiduciary Cases

Overview


In This Section

This section contains the following topics:

1.  General Authorization Issues in Fiduciary Cases


Introduction

This topic outlines general authorization issues in fiduciary cases, including

Change Date

May 16, 2018

III.v.9.C.1.a.  Outdated Fiduciary Appointments and Certifications

Do not process an award to a guardian or other fiduciary
  • based on a fiduciary hub appointment or certification that is more than one year old, and
  • to whom no payment has been made for one year.
Before the authorization activity may process an award under these circumstances, the fiduciary hub must provide either Department of Veterans Affairs (VA) Form 21-555, Certificate of Legal Capacity to Receive and Disburse Benefits, or other notice showing that the appointment or certification remains in full force and effect.
If necessary, request a current VA Form 21-555 by preparing a memorandum to the fiduciary hub, furnishing all of the pertinent information described in M21-1, Part III, Subpart v, 9.A.1.c.

III.v.9.C.1.b.  Processing Awards to Joint Guardians

In cases of joint guardianship, make all awards payable to the guardians as joint payees as shown on the fiduciary hub’s certification.

III.v.9.C.1.c.  Handling the Appointment of Multiple Guardians

If it appears that more than one guardian has been appointed, refer this information to the fiduciary hub.  The fiduciary hub will advise which guardian to pay.

III.v.9.C.1.d.  Handling Irregularities in the Names on Guardianship Papers and Awards

The names of guardians and wards should be identical on guardianship papers and awards.
Process an award in the name shown on the fiduciary hub’s certification if
  • the name of the ward as it appears on the letters of guardianship or the fiduciary hub’s certification is not the same as that under which the claim was filed, and
  • there is no question of identity.

III.v.9.C.1.e.  Handling a Change in the Name of a Beneficiary, Guardian, or Fiduciary

Use the table below to determine the proper action to take upon receipt of notice of a change in the name of a beneficiary, guardian, or fiduciary.
If …
Then …
  • a beneficiary changed his/her name, and
  • payments are being made under letters of guardianship
  • make the change of name without prior approval from the fiduciary hub, and
  • e-mail documentation of the transaction to the fiduciary hub.
  • a guardian’s or legal custodian’s name changed because, subsequent to appointment, he/she
    • married/remarried, or
    • divorced, or
  • a minor change or correction of the name (not identity) of any fiduciary, other than a court-appointed fiduciary, is necessary
  • accept a statement setting forth the new name without the need for further evidence, per 38 CFR 3.856
  • make the change of name without prior approval from the fiduciary hub, and
  • e-mail documentation of the transaction to the fiduciary hub.
a fiduciary certified by the fiduciary hub changes his/her name/identity
change the fiduciary’s name/identity only at the request of the fiduciary hub.

III.v.9.C.1.f.  Notifying a Fiduciary Hub of Changes and Additional Information Regarding a Beneficiary and/or Fiduciary

Use the table below to determine what to provide to a fiduciary hub when notifying the fiduciary hub of various types of changes or additional information regarding a beneficiary and/or fiduciary.
If the change or information involves …
Then …
  • an award, or
  • pending request for appointment of a fiduciary
furnish to the fiduciary hub
  • a copy of all relevant correspondence, or
  • documentation of authorization actions.
permanent transfer of the claims folder
send a copy of VA Form 7216a, Request for and/or Notice of Transfer of Veterans Records, to the fiduciary hub of jurisdiction.
a fiduciary’s
  • loss of constructive custody of the beneficiary, or
  • suitability or fitness to act in a fiduciary capacity
notify the fiduciary hub of all of the facts, including a statement that payments have been suspended, if such action has been taken.
Note:  Correspond with fiduciary hubs via e-mail.
Reference:  To determine the fiduciary hub of jurisdiction, see the M21-1, Part III, Subpart v, 9.A.1.d.

III.v.9.C.1.g.  Handling Retroactive Awards of Less Than $25,000 to Beneficiaries Under Fiduciary Supervision

When a retroactive award to a beneficiary under fiduciary supervision amounts to less than $25,000
  • promulgate and authorize the award
  • send the decision notice to the custodian/guardian
  • ensure the decision notice and award are uploaded into the Veterans Benefit Management System (VBMS), and
  • notify the fiduciary hub of jurisdiction by e-mail of the action taken.
Note:  The fiduciary hub reviews the award to determine any effect it may have on the beneficiary or fiduciary arrangement.
Reference:  For information about contacting a fiduciary hub and fiduciary hub jurisdiction, see M21-1, Part III, Subpart v, 9.A.1.d.

III.v.9.C.1.h.  Handling Retroactive Awards of $25,000 or More to Beneficiaries Under Fiduciary Supervision

When a regional office’s (RO’s) authorization activity identifies a proposed retroactive award to a beneficiary under fiduciary supervision that amounts to $25,000 or more, the authorization activity must e-mail a memorandum to the fiduciary hub of jurisdiction for review to ensure all necessary protection and accounting requirements are in place prior to authorization of the award.
Important:  ROs may not authorize the proposed award until the fiduciary hub
  • completes the pre-promulgation review, and
  • returns the memorandum stating that all necessary protection and accounting requirements are in place.
Note:  The proposed award shall remain in a “generated” status to control for the pending fiduciary hub review and action.
References:

III.v.9.C.1.i.  RO Actions After a Fiduciary Hub Completes Its Review of a Case Involving a Pending Retroactive Award of $25,000 or More

Use the table below to determine the actions an RO must take after a fiduciary hub completes its review of the type of case described in M21-1, Part III, Subpart v, 9.C.1.h.
If the fiduciary hub …
Then …
  • concurs with the pending award action, and
  • confirms the necessary protections and accounting requirements are already in place
authorize the pending award.
does not concur with the proposed award action because it determined
  • estate protection is necessary, or
  • the protection in place needs to be increased
  • return the award from the “generated” status, and
  • postpone generation and authorization of the award until  the fiduciary hub confirms the necessary protections and accounting requirements are in place.
 
Note:  When authorizing an award with retroactive benefits over $25,000, a third signature (concurrence) will be required by the Veteran Service Center Manager or designee no lower than a Coach.
Reference:  For more information about awards that require a third signature, see the

III.v.9.C.1.j.  Sample Memorandum to a Fiduciary Hub Requesting Review of a Case Involving a Pending Retroactive Award of $25,000 or More

The following is a sample of the memorandum that the authorization activity must accurately complete and e-mail to the fiduciary hub of jurisdiction for review and completion whenever it identifies a beneficiary who is
  • under fiduciary supervision, and
  • entitled to a retroactive award of $25,000 or more.
 A sample of the memorandum that must be accurately completed and e-mailed by the authorization activity to the fiduciary hub of jurisdiction for review and completion for the retroactive release of benefits of $25,000 or more.

2.  Authorizing Awards Involving a Fiduciary for a Minor or Incompetent Adult

 


Introduction

This topic contains information on authorizing an award that involves a fiduciary for a minor or incompetent adult, including

Change Date

May 16, 2018

III.v.9.C.2.a. Fiduciary Hub Certification Requirement for Court-Appointed Fiduciaries

When a court appoints a fiduciary for a minor or incompetent claimant, do not make payments to the fiduciary until the fiduciary hub furnishes VA Form 21-555.
After receiving court documents indicating the appointment of a fiduciary from anyone other than the fiduciary hub,
  • review the claims folder and corporate record to determine if a fiduciary exists, and
  • take action as outlined in the table below.
If a fiduciary …
Then …
exists
e-mail notification of the receipt of the court documents to the fiduciary hub of jurisdiction for review and
  • recognition of the fiduciary, or
  • appointment of a successor fiduciary, if necessary.
does not exist

III.v.9.C.2.b.  Authorizing an Award for a Certified Fiduciary-Payee

Follow the steps in the table below when a fiduciary hub furnishes VA Form 21-555to the authorization activity.
Step
Action
1
Prepare the award using the following information as it appears in the fiduciary hub’s certification:
  • name and address of the fiduciary-payee
  • the legend, and
  • the name of the beneficiary.
Examples:  Examples of legends include
  • custodian of, and
  • guardian of.
2
Annotate the award with the following notation: Fiduciary-payee certified by fiduciary hub.
3
Furnish the certifying fiduciary hub with documentation of any award made as a result of certification by that fiduciary hub, including awards in supervised direct payment cases.
 
Note:  Fiduciary hubs typically authorize awards for certified fiduciary-payees, but there are circumstances under which ROs must authorize these awards.
Example:  ROs must authorize awards associated with
  • Integrated Disability Evaluation System claims
  • Restricted Access Claims Center claims
  • claims with attorney fee agreements, and
  • claims from foreign residents.

III.v.9.C.2.c.  References for Special Authorization Procedures

For information on special authorization procedures for a(n)

3.  Controlling Awards for Children


Introduction

This topic contains information on controlling awards for children, including

Change Date

May 16, 2018

III.v.9.C.3.a.  Authority for Determining Minority Status and the Propriety of Making Direct Payments to Children

Determinations as to minority status and the propriety of making direct payments to children are governed by
  • State law as to the age of attainment of majority, and

III.v.9.C.3.b.  Establishing a Diary When Awarding Benefits to a Fiduciary for a Minor

When an award is made to a fiduciary for a minor, establish a diary under diary code 20, Helpless Child Reaches Majority, that will expire three months before the date the child reaches the age of majority, so as to allow sufficient time to determine the propriety of making direct payments to the child.
 
References:  For more information about

III.v.9.C.3.c.  Age of Majority by State/Territory

Use the table below to determine the age of majority by State or U.S. territory.
State/Territory
Majority Age
State/Territory
Majority Age
Alabama
19
Nebraska
19
Alaska
18
Nevada
18
American Samoa
18
New Hampshire
18
Arizona
18
New Jersey
18
Arkansas
18
New Mexico
18
California
18
New York
18
Colorado
18
North Carolina
18
Connecticut
18
North Dakota
18
Delaware
18
Ohio
18
District of Columbia
18
Oklahoma
18
Florida
18
Oregon
18
Georgia
18
Pennsylvania
18
Guam
18
Philippine Republic
21
Hawaii
18
Puerto Rico
21
Idaho
18
Rhode Island
18
Illinois
18
South Carolina
18
Indiana
18
South Dakota
18
Iowa
18
Tennessee
18
Kansas
18
Texas
18
Kentucky
18
Trust Territory
18
Louisiana
18
Utah
18
Maine
18
Vermont
18
Maryland
18
Virgin Islands
18
Massachusetts
18
Virginia
18
Michigan
18
Washington
18
Minnesota
18
West Virginia
18
Mississippi
18
Wisconsin
18
Missouri
18
Wyoming
18
Montana
18

III.v.9.C.3.d.  Establishing a Diary When Awarding Benefits to a Fiduciary for a Mentally Incompetent Minor

When awarding benefits to a fiduciary for a minor whom the rating activity has determined is incapable of self-support due to mental incompetency,
  • do not enter an end date for the award (make it an open-ended award)
  • establish a diary that will expire six months before the date the child reaches the age of majority, and
  • when the diary expires, send the fiduciary hub a request for the appointment of a fiduciary for the child as a mentally incompetent adult.

III.v.9.C.3.e.  Establishing a Diary When Awarding Benefits to a Fiduciary for a Physically Incapacitated Minor

When awarding benefits to a fiduciary (including one recognized under 38 CFR 3.850(c)) for a physically incapacitated child, only because the child is a minor,
  • establish a diary that will expire three months before the date the child reaches the age of majority, and
  • when the diary expires,
    • obtain the child’s current address
    • prepare an award providing direct payment to the child, per 38 CFR 3.854, and
    • e-mail notification of the actions taken to the fiduciary hub of jurisdiction.

III.v.9.C.3.f.  Establishing a Diary When Awarding Benefits to a Fiduciary for a Minor Who Is Attending School

When awarding benefits for a child to a fiduciary or a parental custodian (only because the child is a minor), take the following actions if the child is over age 18 and attending school:
  • establish a diary that will expire 60 days before the date the child reaches the age of majority, and
  • when the diary expires,
    • confirm the child has not married and is still attending school
    • take action to provide direct payment to the child, and
    • e-mail notification of the actions taken to the fiduciary hub of jurisdiction.
Note:  The proper effective date for direct payment is the later of the following dates:
  • the first day of the month during which the child reaches the age of majority, or
  • the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.

III.v.9.C.3.g.  Statutory Change in the Age of Majority

Statutory changes in the age of majority make it necessary to authorize direct payment when
  • payments are being made through a fiduciary only because of the minority status of a child or children, and
  • the custodian or child(ren) requests direct payment pursuant to the statutory change.
Note:  Fiduciary hubs routinely identify beneficiaries under their jurisdiction that are affected by the enactment of a law that lowers the age of majority.

III.v.9.C.3.h.  Authorizing Direct Payment Due to a Statutory Change in the Age of Majority

To authorize a direct payment because of a statutory change in the age of majority,
  • change the name and address of the payee, and
  • make the change to direct payment effective the date in the LAST PAID DATE field on the AWARD INFORMATION tab in Share.
Exception:  If payments are being made through a court-appointed fiduciary, refer the request for direct payment to the fiduciary hub before making any change.

III.v.9.C.3.i.  Retroactive Benefits in an Award to a Child Who Has Reached the Age of Majority

Per 38 CFR 3.403(a)(2), when awarding benefits to a child on or after the date he/she reaches the age of majority, include in the award any retroactive benefits owed to the child, even if the benefits are for a period of time during which the child was a minor.

4.  Authorizing Awards Involving a Custodian Under 38 CFR 3.850(c)


Introduction

This topic contains information on authorizing awards involving a custodian, including

Change Date

May 16, 2018

III.v.9.C.4.a.  When to Authorize an Award Under 38 CFR 3.850(c)

Per 38 CFR 3.850(c), make payments to a custodian on behalf of a minor child without prior submission to, or certification by, a fiduciary hub when the following conditions exist:
  • the custodian to be recognized is the natural or adoptive parent or stepparent of the child
  • the child is in the actual or constructive custody of the parent, and
  • there is no information of record that indicates the parent is unfit.
Note:  If the custodian to be recognized is the natural or adoptive parent or stepparent, establish that a legal relationship exists.

III.v.9.C.4.b.  When Not to Authorize an Award Under 38 CFR 3.850(c)

Do not authorize an award under 38 CFR 3.850(c) when any of the following situations exist:
  • A fiduciary hub has certified a legal custodian or fiduciary.
  • A court-appointed fiduciary is either in place or an appointment is pending.
  • Completion and submission of VA Form 21-592 to the fiduciary hub of jurisdiction is required
    • by virtue of the child’s entitlement to VA insurance benefits, or
    • by reason of incompetency of an adult child who is incapable of self-support.

III.v.9.C.4.c.  Authorizing an Award Under 38 CFR 3.850(c) and Notifying the Custodian

Follow the steps in the table below to authorize an award under 38 CFR 3.850(c)and notify the custodian.
Important:  Make no award under 38 CFR 3.850(c) for an incompetent adult child who is incapable of self-support.  Instead, request the appointment or certification of a fiduciary, per M21-1, Part III, Subpart v, 9.A.1.a.
Step
Action
1
Prepare the award showing the name of the parent as the custodian.
2
Annotate the award print with the following notation: Custodian recognized under 38 CFR 3.850(c).
3
Send the decision notice to the custodian.

III.v.9.C.4.d.  Handling the Certification of a Fiduciary After Authorizing an Award Under 38 CFR 3.850(c)

In some cases, the custodian recognized by the authorization activity is found unsuitable to act in a fiduciary capacity.  When this occurs, the fiduciary hub may
  • recommend a suspension of payments to conserve the beneficiary’s funds, and
  • proceed with the appointment of an acceptable fiduciary.
When an award to a custodian has been authorized under 38 CFR 3.850(c), and the fiduciary hub subsequently certifies the same or a different person as fiduciary, make payments to the person certified by the fiduciary hub.
Note:  If the only action taken is the change or removal of a fiduciary, a notice of proposed adverse action is not required.

III.v.9.C.4.e.  Actions to Take When a Custodian Ceases to Have Custody of a Child Beneficiary

If the authorization activity learns that a custodian recognized under 38 CFR 3.850(c) ceases to have custody of a child beneficiary,
  • submit VA Form 21-592 to the fiduciary hub, furnishing detailed information as to the status of the child’s custody, and
  • include any information on the suitability of a parent to act as the child’s custodian.

5.  Authorizing Awards Involving a Native American Minor or Incompetent Adult Under 38 CFR 13.62


Introduction

This topic contains information on authorizing awards involving a Native American minor or incompetent adult under 38 CFR 13.62, including

Change Date

May 16, 2018

III.v.9.C.5.a.  Awards Under 38 CFR 13.62 to a Bonded Officer of the Native American Reservation

Under 38 CFR 13.62, an award for the use of a Native American beneficiary may be paid to the recognized superintendent or bonded officer of the Native American Reservation.  Send VA Form 21-592 to the fiduciary hub for certification of the payee before processing the award.

III.v.9.C.5.b.  Payee for Awards Authorized Under 38 CFR 13.62

Do not enter the name of the superintendent or bonded officer of the Native American Reservation as the payee when authorizing an award under 38 CFR 13.62.  Enter the following instead:  Bureau of Indian Affairs [name of agency or regional office], for [name of Native American beneficiary].
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