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| AAWV American Association of Wartime Veterans |
| 8th of Dec, 2011 by User103657 |
AAWV DEFINED AAWV is a for-profit organization that educates veterans on available government benefits for which they may be eligible to help defray the costs of assisted living, nursing home, or (if you have substantial money) home health care. Namely, they are experts in the VA's Aid & Attendance (A&A) pension for veterans looking at moving into independent living facilities, assisted living facilities, nursing homes, memory care centers, etc. In rare cases, they will help you qualify for roughly half the full benefit while you still reside in your home. Their "Professional Members", those who go out to various senior communities and pitch their services, offer to help eligible veterans apply for the VA Aid & Attendance Improved Pension. Their "professional members" say they help the majority of the veterans they work with for free. THE CATCH The AAWV is affiliated with an insurance company. Their "Professional Members" get paid by working with people that need to move money into new investments inside of trusts or when gifted to family members in order to qualify for the VA's A&A program. The only investments they recommend are insurance-based investments (fixed annuities, variable annuities, indexed universal annuities, & various life insurance strategies) with extremely rare exceptions. Why? Because the "Professional Members" are almost always insurance salesmen that can't recommend actual investments (The overwhelming majority don't have an active Series 7 License). The result? They rack up a lot of money in commissions from the high-fee annuities and life insurance products they sell when it might have been better for you to invest in a different investment through a financial advisor with higher qualifications they can use. What's more? The AAWV only approves a very select few annuity and life insurance companies that their advisors can recommend. As such, the annuity products and life insurance policies they recommend are by well-rated, but small-to-mid-size companies with somewhat-high to ridiculously-high fees. The high fees are shared between their "Professional Members" and the AAWV's affiliated insurance company, which filters the money back to AAWV. So, is it a scam? It depends. WHAT IS GOOD ABOUT AAWV AAWV is the industry leader in getting people approved for the A&A benefit. They submit over 1,000 applications per year. If they submit your application, it is something-like 99% guaranteed that you will get approved by the VA (you might go through a round or two of denials, but you will get approved retroactive to the first day of the month after you first applied). This brings up point two: They are arguably the best at arguing for the case of the Veteran during a request for additional information or a denial. They used to have a liaison at one of the VA offices that smoothed things over for all of their high-dollar applicants. That may or may not be the case anymore, but it is not really negatively impacting their ability to get applications approved. Finally, they know the rules within the rules that are not published publicly that will get you declined. The best example: While the VA says you can have $80K in assets and get approved for this program, the number is almost always lower than that depending on your age. (The older you are the less you can have.) You can almost treat the maximum allowable cash asset number AAWV gives you as absolute gospel. (In fact, if you use someone other than AAWV to do your plan, I’d think long and hard about having more assets on hand than AAWV recommended.) WHAT TO WATCH OUT FOR Below are the categories of people that work with AAWV and what to watch out for... Veterans with a Home: 1) Successful AAWV Professional Members work with a selection of 20 to 40 facilities ranging from independent living to alzheimers care centers. Why does that matter if you own a home? Because the chances are good you learned about them through one of these facilities, and the AAWV rep will NOT tell you that you can get roughly half of the benefit if you want to just stay at home unless you specifically ask and (during the second meeting) specifically state this is the only option you are willing to consider. But be realistic! If the AAWV rep shows you that you don't have enough money to sustain yourself in your home unless you become a Medicaid patient in a year or so, moving into a facility might actually be the better financial decision. And I have never known a veteran that regretted moving into a reasonably priced facility 6 months after they moved... These facilities just aren't what they used to be. 2) Make sure you mention you still own a home if you are talking to any A&A Advisor (either AAWV or through some other source). You will almost always have to use an experienced Estate Planning Attorney to set up a trust to put the home in. Why? Because if you don't, when you sell the home, your A&A benefit will be put on hold until the value of the home is spent down, or you might be made to pay back the part of the A&A benefit you already received from the VA (I've only heard rumors that the latter point has happened, but it can be easily avoided by making sure the appropriate trust is created). Veterans without Significant Money, Investments, or Assets (like a home): It goes without saying that if you have less than a couple years’ worth of money to live on while staying at the facility you are looking into, there are few appropriate annuity or life insurance investments the AAWV Professional Member can recommend. So, if they come back and don't make any investment recommendations, you have little to worry about with AAWV being a scam. However, what they might not tell you is that there are a half-dozen cheaper facilities you could look into that would guarantee you would never run out of money- and you might have a little left over for incidental costs (like transportation costs for outings to non-medically related things). Veterans with Money, Investments, and/or Assets (like a home): You are almost always better off using the attorney that the AAWV representative recommends, but buyer beware of any of the financial recommendations the AAWV Professional Member recommends. An interesting take on this is to ALWAYS GET A SECOND OPINION from another estate planning attorney and financial advisor. Here's how: There is a "loophole" that eliminates the ability of the AAWV Professional Member to strong-arm you into investments that might be inappropriate. Here's the trigger to know you need a second opinion: You meet with the AAWV Professional Member and he recommends you gift money to family members or recommends you to talk to his Estate Planning Attorney. At that point, you collect his proposal (if gifting is proposed) or you meet with the AAWV Estate Planning Attorney (if a trust might be needed). Collect the Estate Planning Attorney's proposal and say you'd like to meet with the AAWV rep and will then have to talk it over with the family. (The proposal should include what to do with your money and/or what types of trusts they want to write on your behalf.) Then, you have another meeting with the AAWV Professional Member and collect his proposal including financial investments (if any). Do not giver permission for anyone to move forward verbally with writing up trusts or transferring investments. Just keep deferring by saying the family is talking it over. You can get a list of VA Accredited Attorneys from the VA website. Call them an ask how many Aid and Attendance applications they’ve done in the last two years and how many have been denied. Ask them how long their average application goes through (4 to 6 months is a good range). If you get two reasonable answers above, call back the best three and set up a free consultation. Take the previous AAWV recommended attorney’s plan and ask, in general terms, if they agree with the plan. Be willing to spend up to $250 to have the plan analyzed by the attorney you feel is the most honest, capable, and would be willing to help you apply for less than $3,000. Have the attorney you felt was the most honest, capable and would be willing to move forward with you if you choose to accept the alternative, do the $250 analysis. If the analysis comes back the same or similar ask the Estate Planning Attorney if they work closely with any INDEPENDENT Financial Advisors they trust that have both their Life Insurance License and their Series SEVEN license. This Financial Advisor should meet with you and provide their proposal and any advice they give you for free (if not, ask for another recommendation from the Attorney). Have the financial advisor compare the investment recommendations and choose the investment strategy/strategies that best fit your risk tolerance and goals... And make sure the new Financial Advisor compares the cost between the two proposals and the surrender periods/restrictions. Here's the greatest irony: Most financial advisors and attorneys (that are not VA Accredited) and a fair number of the VA Accredited Attorneys don't know how to do the A&A applications right. So, if the second attorney says, "You don't have to do this type of trust for this income level" the chances are incredibly good that they are WRONG. (Remember what AAWV does Good? AAWV is the best at getting veterans approved, and they know the rules better than almost everyone else.) Move onto another VA Accredited attorney or just use AAWV. Independent Care,
Retirement, Assisted Living, Nursing Home, Memory Care, & Alzheimers Care Facilities: AAWV has some of the best salesmen in the A&A field. They are impressive, aggressive, and have the resources to get all of your veterans on this who meet the physical criteria. If you think only referring to them is safe or smart, you’re wrong. I predict there will be several lawsuits in the very near future where it will be concluded that facilities that worked exclusively with AAWV (or that placed a disproportionately high trust in AAWV instead of using several different A&A advisors and/or investigating on their own VA Accredited alternatives) will start getting sued. Here’s why: The fees the investment products that AAWV recommends are high, and a few of their practices (especially by sloppy Professional Members) could be interpreted as predatory towards elderly veterans. Out of all of the associations working today to help veterans with A&A, AAWV, is the best at getting veterans approved. However, they are also severely restricted in the financial recommendations that they make. This is a Catcha 22. If you get overly involved and start looking at what investments are recommended, you cross the line and become a financial advisor. If you get under-involved, you might get lumped into a case where your relationship with AAWV and your other A&A advisors means you were careless in the level of access you allowed these associations within your facility and by association are guilty and liable. If you don’t have a plan detailing how you will respond to a class action suit and how you will mitigate this risk in the interim, I firmly believe you and your organization are foolish. Financial Advisors: I used to work as an AAWV "Professional Member" but left on my own due to what I felt was an ethical conflict of interest... Management changed, and I was going to be forced to recommend investments that I knew were sub-par for what the average independent financial advisor would recommend. I was further constrained by their internal policies, because they would not let me make recommendations on more appropriate investment products- even when I volunteered to donate 50% of the commissions for those products to AAWV! Instead, I recommend becoming a VA Accredited financial advisor, pairing up with the most ethical estate planning/trust attorney you know (you could probably find one on the VA Accredited Attorney list) and doing this as an independent financial advisor with an investment company that does not require that you sell only their financial products. If you are smart, you will attend an AAWV seminar at a facility, take copious notes about how they are selling, and go through the process as if you are a concerned son/daughter looking to have your modestly wealthy parent move into the facility ($500K in an unqualified investment account & a $750K home that is paid off will get them motivated to meet and work with you). You're looking at an investment of more than $5K to get a comparable operation up and running (projector, screen, presentation with audio, etc). But that should pay off quickly if you have good ethics and decent salesmanship skills. To be clear: If you have a Series 7, you won't be able to use it with AAWV or their insurance affiliate (with the possible exception of Michigan which is over-run with these guys). Series 6 reps: You won't really be able to use yours either, but chances are that you are the despicable low-fruit/high-commission unethical/captured insurance-slinging idiots AAWV is looking for. May God have mercy on your soul, cause if I run into you in a public setting I sure-as-Hades will not. |
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