So-called “advocates” are targeting veterans and their spouses with a scam. They are telling veterans to shelter assets in order to qualify for Aid and Attendance from the Veterans Administration. If it sounds too good to be true, it probably is.

First, what is Aid and Attendance? A&A is financial assistance from the Veterans Administration that helps with daily activities like bathing, dressing and taking medications. As a general rule, a veteran or the spouse of a veteran who is receiving care at home or in a long-term care facility who owns a home, a car and limited cash assets may be eligible for A&A.

The Washington State Attorney General is investigating complaints about people who conduct seminars at senior centers and long-term care facilities telling veterans and their families that they can help with A&A eligibility by putting assets into a trust or giving them to their children, who are then advised to buy an annuity. These “advocates” make large commissions from selling the trusts and annuities. They promise help with applying for A&A, but they usually don’t submit your application until a trust or annuity is bought.

There are three major problems with this scheme.

First, even though there is currently no penalty for veterans to give away assets in order to meet the financial criteria to qualify for A&A, there is a five-year look-back period for gifts when applying for Medicaid (a government program that helps people pay for long-term care when they cannot otherwise afford it). This means putting assets into a trust or gifting them to children can result in denial of Medicaid benefits. In that case, a trust and/or gift may have to be undone in order to qualify.

Second, the problem gets even worse because undoing a trust or annuity usually results in less than 100 percent of the initial investment being returned. An attorney may need to assist in destroying the trust and there are large surrender fees paid to get your money back out of the annuity. Also, your children may face a civil fine or need to pay for your care while you are ineligible for Medicaid.

Third, you do not need the assistance of an advocate to apply for A&A. Free help is available. The V.A., the American Legion, the Washington State Department of Veterans Affairs, and the VFW can all be directly contacted for help.

Complaints against these A&A scams can and should be made to the Washington State Attorney General’s Office, www.atg.wa.gov.

AUTHOR: Megan S. Farr is an estate planning and elder law attorney with Farr Law Group in Enumclaw.