1. U.S. Code
  2. title 38
  3. part IV
  4. chapter 55
  5. § 5507

Collapse to view only § 5507. Inquiry, investigations, and qualification of fiduciaries

§ 5501. Commitment actions

The Secretary may incur necessary court costs and other expenses incident to proceedings for the commitment of mentally incompetent veterans to a Department hospital or domiciliary when necessary for treatment or domiciliary purposes.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1232, § 3201; renumbered § 5501, Pub. L. 102–40, title IV, § 402(b)(1), May 7, 1991, 105 Stat. 238; amended Pub. L. 102–83, § 4(a)(3), (4), (b)(1), (2)(E), Aug. 6, 1991, 105 Stat. 404, 405.)

CITE AS: 38 USC 5501

§ 5501A. Beneficiaries’ rights in mental competence determinations
(1) Notice of the proposed adverse determination and the supporting evidence.
(2) An opportunity to request a hearing.
(3) An opportunity to present evidence, including an opinion from a medical professional or other person, on the capacity of the beneficiary to manage monetary benefits paid to or for the beneficiary by the Secretary under this title.
(4) An opportunity to be represented at no expense to the Government (including by counsel) at any such hearing and to bring a medical professional or other person to provide relevant testimony at any such hearing.
(Added Pub. L. 114–255, div. B, title XIV, § 14017(a), Dec. 13, 2016, 130 Stat. 1307.)

CITE AS: 38 USC 5501A

§ 5502. Payments to and supervision of fiduciaries
(a)
(1) Where it appears to the Secretary that the interest of the beneficiary would be served thereby, payment of benefits under any law administered by the Secretary may be made directly to the beneficiary or to a relative or some other fiduciary for the use and benefit of the beneficiary, regardless of any legal disability on the part of the beneficiary. Where, in the opinion of the Secretary, any fiduciary receiving funds on behalf of a Department beneficiary is acting in such a number of cases as to make it impracticable to conserve properly the estates or to supervise the persons of the beneficiaries, the Secretary may refuse to make future payments in such cases as the Secretary may deem proper.
(2) In a case in which the Secretary determines that a commission is necessary in order to obtain the services of a fiduciary in the best interests of a beneficiary, the Secretary may authorize a fiduciary appointed by the Secretary to obtain from the beneficiary’s estate a reasonable commission for fiduciary services rendered, but the commission for any year may not exceed 4 percent of the monetary benefits under laws administered by the Secretary paid on behalf of the beneficiary to the fiduciary during such year. A commission may not be authorized for a fiduciary who receives any other form of remuneration or payment in connection with rendering fiduciary services for benefits under this title on behalf of the beneficiary.
(b) Whenever it appears that any fiduciary, in the opinion of the Secretary, is not properly executing or has not properly executed the duties of the trust of such fiduciary or has collected or paid, or is attempting to collect or pay, fees, commissions, or allowances that are inequitable or in excess of those allowed by law for the duties performed or expenses incurred, or has failed to make such payments as may be necessary for the benefit of the ward or the dependents of the ward, then the Secretary may appear, by the Secretary’s authorized attorney, in the court which has appointed such fiduciary, or in any court having original, concurrent, or appellate jurisdiction over said cause, and make proper presentation of such matters. The Secretary, in the Secretary’s discretion, may suspend payments to any such fiduciary who shall neglect or refuse, after reasonable notice, to render an account to the Secretary from time to time showing the application of such payments for the benefit of such incompetent or minor beneficiary, or who shall neglect or refuse to administer the estate according to law. The Secretary may require the fiduciary, as part of such account, to disclose any additional financial information concerning the beneficiary (except for information that is not available to the fiduciary). The Secretary may appear or intervene by the Secretary’s duly authorized attorney in any court as an interested party in any litigation instituted by the Secretary or otherwise, directly affecting money paid to such fiduciary under this section.
(c) Authority is hereby granted for the payment of any court or other expenses incident to any investigation or court proceeding for the appointment of any fiduciary or other person for the purpose of payment of benefits payable under laws administered by the Secretary or the removal of such fiduciary and appointment of another, and of expenses in connection with the administration of such benefits by such fiduciaries, or in connection with any other court proceeding hereby authorized, when such payment is authorized by the Secretary.
(d) All or any part of any benefits the payment of which is suspended or withheld under this section may, in the discretion of the Secretary, be paid temporarily to the person having custody and control of the incompetent or minor beneficiary, to be used solely for the benefit of such beneficiary, or, in the case of an incompetent veteran, may be apportioned to the dependent or dependents, if any, of such veteran. Any part not so paid and any funds of a mentally incompetent or insane veteran not paid to the chief officer of the institution in which such veteran is a patient nor apportioned to the veteran’s dependent or dependents may be ordered held in the Treasury to the credit of such beneficiary. All funds so held shall be disbursed under the order and in the discretion of the Secretary for the benefit of such beneficiary or the beneficiary’s dependents. Any balance remaining in such fund to the credit of any beneficiary may be paid to the beneficiary if the beneficiary recovers and is found competent, or if a minor, attains majority, or otherwise to the beneficiary’s fiduciary, or, in the event of the beneficiary’s death, to the beneficiary’s personal representative, except as otherwise provided by law; however, payment will not be made to the beneficiary’s personal representative if, under the law of the beneficiary’s last legal residence, the beneficiary’s estate would escheat to the State. In the event of the death of a mentally incompetent or insane veteran, all gratuitous benefits under laws administered by the Secretary deposited before or after August 7, 1959, in the personal funds of patients trust fund on account of such veteran shall not be paid to the personal representative of such veteran, but shall be paid to the following persons living at the time of settlement, and in the order named: The surviving spouse, the children (without regard to age or marital status) in equal parts, and the dependent parents of such veteran, in equal parts. If any balance remains, such balance shall be deposited to the credit of the applicable current appropriation; except that there may be paid only so much of such balance as may be necessary to reimburse a person (other than a political subdivision of the United States) who bore the expenses of last sickness or burial of the veteran for such expenses. No payment shall be made under the two preceding sentences of this subsection unless claim therefor is filed with the Secretary within five years after the death of the veteran, except that, if any person so entitled under said two sentences is under legal disability at the time of death of the veteran, such five-year period of limitation shall run from the termination or removal of the legal disability.
(e) Any funds in the hands of a fiduciary appointed by a State court or the Secretary derived from benefits payable under laws administered by the Secretary, which under the law of the State wherein the beneficiary had last legal residence would escheat to the State, shall escheat to the United States and shall be returned by such fiduciary, or by the personal representative of the deceased beneficiary, less legal expenses of any administration necessary to determine that an escheat is in order, to the Department, and shall be deposited to the credit of the applicable revolving fund, trust fund, or appropriation.
(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1232, § 3202; Pub. L. 86–146, § 1(a), Aug. 7, 1959, 73 Stat. 297; Pub. L. 92–328, title I, § 105(a), June 30, 1972, 86 Stat. 395; Pub. L. 93–295, title III, § 301, May 31, 1974, 88 Stat. 183; Pub. L. 97–295, § 4(77), Oct. 12, 1982, 96 Stat. 1311; Pub. L. 98–223, title II, § 207(a), (b)(1), Mar. 2, 1984, 98 Stat. 43; Pub. L. 99–576, title V, § 505, title VII, § 701(76), Oct. 28, 1986, 100 Stat. 3287, 3297; renumbered § 5502 and amended Pub. L. 102–40, title III, § 305(a), title IV, § 402(b)(1), May 7, 1991, 105 Stat. 210, 238; Pub. L. 102–83, § 4(a)(1), (2)(A)(ix), (3), (4), (b)(1), (2)(E), Aug. 6, 1991, 105 Stat. 403–405; Pub. L. 108–454, title V, § 501(b), Dec. 10, 2004, 118 Stat. 3617.)

CITE AS: 38 USC 5502

§ 5503. Hospitalized veterans and estates of incompetent institutionalized veterans
(a)
(1)
(A) Where any veteran having neither spouse nor child is being furnished domiciliary care by the Department, no pension in excess of $90 per month shall be paid to or for the veteran for any period after the end of the third full calendar month following the month of admission for such care.
(B) Except as provided in subparagraph (D) of this paragraph, where any veteran having neither spouse nor child is being furnished nursing home care by the Department, no pension in excess of $90 per month shall be paid to or for the veteran for any period after the end of the third full calendar month following the month of admission for such care. Any amount in excess of $90 per month to which the veteran would be entitled but for the application of the preceding sentence shall be deposited in a revolving fund at the Department medical facility which furnished the veteran nursing care, and such amount shall be available for obligation without fiscal year limitation to help defray operating expenses of that facility.
(C) No pension in excess of $90 per month shall be paid to or for a veteran having neither spouse nor child for any period after the month in which such veteran is readmitted for care described in subparagraph (A) or (B) of this paragraph and furnished by the Department if such veteran is readmitted within six months of a period of care in connection with which pension was reduced pursuant to subparagraph (A) or (B) of this paragraph.
(D) In the case of a veteran being furnished nursing home care by the Department and with respect to whom subparagraph (B) of this paragraph requires a reduction in pension, such reduction shall not be made for a period of up to three additional calendar months after the last day of the third month referred to in such subparagraph if the Secretary determines that the primary purpose for the furnishing of such care during such additional period is for the Department to provide such veteran with a prescribed program of rehabilitation services, under chapter 17 of this title, designed to restore such veteran’s ability to function within such veteran’s family and community. If the Secretary determines that it is necessary, after such period, for the veteran to continue such program of rehabilitation services in order to achieve the purposes of such program and that the primary purpose of furnishing nursing home care to the veteran continues to be the provision of such program to the veteran, the reduction in pension required by subparagraph (B) of this paragraph shall not be made for the number of calendar months that the Secretary determines is necessary for the veteran to achieve the purposes of such program.
(2) The provisions of paragraph (1) shall also apply to a veteran being furnished such care who has a spouse but whose pension is payable under section 1521(b) of this title. In such a case, the Secretary may apportion and pay to the spouse, upon an affirmative showing of hardship, all or any part of the amounts in excess of the amount payable to the veteran while being furnished such care which would be payable to the veteran if pension were payable under section 1521(c) of this title.
(b) Notwithstanding any other provision of this section or any other provision of law, no reduction shall be made in the pension of any veteran for any part of the period during which the veteran is furnished hospital treatment, or institutional or domiciliary care, for Hansen’s disease, by the United States or any political subdivision thereof.
(c) Where any veteran in receipt of an aid and attendance allowance described in subsection (r) or (t) of section 1114 of this title is hospitalized at Government expense, such allowance shall be discontinued from the first day of the second calendar month which begins after the date of the veteran’s admission for such hospitalization for so long as such hospitalization continues. Any discontinuance required by administrative regulation, during hospitalization of a veteran by the Department, of increased pension based on need of regular aid and attendance or additional compensation based on need of regular aid and attendance as described in subsection (l) or (m) of section 1114 of this title, shall not be effective earlier than the first day of the second calendar month which begins after the date of the veteran’s admission for hospitalization. In case a veteran affected by this subsection leaves a hospital against medical advice and is thereafter admitted to hospitalization within six months from the date of such departure, such allowance, increased pension, or additional compensation, as the case may be, shall be discontinued from the date of such readmission for so long as such hospitalization continues., shall not be effective earlier than the first day of the second calendar month which begins after the date of the veteran’s admission for hospitalization. In case a veteran affected by this subsection leaves a hospital against medical advice and is thereafter admitted to hospitalization within six months from the date of such departure, such allowance, increased pension, or additional compensation, as the case may be, shall be discontinued from the date of such readmission for so long as such hospitalization continues.
(d)
(1) For the purposes of this subsection—
(A) the term “Medicaid plan” means a State plan for medical assistance referred to in section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a)); and
(B) the term “nursing facility” means a nursing facility described in section 1919 of such Act (42 U.S.C. 1396r), other than a facility that is a State home with respect to which the Secretary makes per diem payments for nursing home care pursuant to section 1741(a) of this title.
(2) If a veteran having neither spouse nor child is covered by a Medicaid plan for services furnished such veteran by a nursing facility, no pension in excess of $90 per month shall be paid to or for the veteran for any period after the month of admission to such nursing facility.
(3) Notwithstanding any provision of title XIX of the Social Security Act, the amount of the payment paid a nursing facility pursuant to a Medicaid plan for services furnished a veteran may not be reduced by any amount of pension permitted to be paid such veteran under paragraph (2) of this subsection.
(4) A veteran is not liable to the United States for any payment of pension in excess of the amount permitted under this subsection that is paid to or for the veteran by reason of the inability or failure of the Secretary to reduce the veteran’s pension under this subsection unless such inability or failure is the result of a willful concealment by the veteran of information necessary to make a reduction in pension under this subsection.
(5)
(A) The provisions of this subsection shall apply with respect to a surviving spouse having no child in the same manner as they apply to a veteran having neither spouse nor child.
(B) The provisions of this subsection shall apply with respect to a child entitled to pension under section 1542 of this title in the same manner as they apply to a veteran having neither spouse nor child.
(6) The costs of administering this subsection shall be paid for from amounts available to the Department of Veterans Affairs for the payment of compensation and pension.
(7) This subsection expires on November 30, 2031.
(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1234, § 3203; Pub. L. 86–146, §§ 1(b), 2, Aug. 7, 1959, 73 Stat. 298; Pub. L. 86–211, § 6, Aug. 29, 1959, 73 Stat. 435; Pub. L. 87–544, § 1, July 25, 1962, 76 Stat. 208; Pub. L. 87–556, § 1, July 27, 1962, 76 Stat. 245; Pub. L. 87–645, § 2(b), Sept. 7, 1962, 76 Stat. 441; Pub. L. 88–450, § 5(a), Aug. 19, 1964, 78 Stat. 504; Pub. L. 89–362, §§ 1, 2, Mar. 7, 1966, 80 Stat. 30; Pub. L. 91–24, § 10, June 11, 1969, 83 Stat. 34; Pub. L. 92–328, title I, § 104, June 30, 1972, 86 Stat. 394; Pub. L. 93–177, § 5, Dec. 6, 1973, 87 Stat. 696; Pub. L. 95–588, title III, § 307, Nov. 4, 1978, 92 Stat. 2510; Pub. L. 96–385, title V, § 503(b), Oct. 7, 1980, 94 Stat. 1534; Pub. L. 97–66, title VI, § 602, Oct. 17, 1981, 95 Stat. 1034; Pub. L. 98–160, title VII, § 703(4), Nov. 21, 1983, 97 Stat. 1010; Pub. L. 98–543, title IV, § 402(a), Oct. 24, 1984, 98 Stat. 2749; Pub. L. 99–576, title VII, § 701(77), Oct. 28, 1986, 100 Stat. 3298; Pub. L. 101–237, title I, § 111(a), Dec. 18, 1989, 103 Stat. 2064; Pub. L. 101–508, title VIII, § 8003(a), Nov. 5, 1990, 104 Stat. 1388–342; renumbered § 5503 and amended Pub. L. 102–40, title III, § 304(a), title IV, § 402(b)(1), May 7, 1991, 105 Stat. 209, 238; Pub. L. 102–83, §§ 4(a)(2)(A)(x), (3), (4), (b)(1), (2)(E), 5(c)(1), Aug. 6, 1991, 105 Stat. 403–406; Pub. L. 102–86, title I, § 101(a), Aug. 14, 1991, 105 Stat. 414; Pub. L. 102–568, title VI, § 601(a)–(c), Oct. 29, 1992, 106 Stat. 4341; Pub. L. 103–66, title XII, § 12005, Aug. 10, 1993, 107 Stat. 414; Pub. L. 105–33, title VIII, § 8015, Aug. 5, 1997, 111 Stat. 664; Pub. L. 105–368, title IX, § 904(a), Nov. 11, 1998, 112 Stat. 3361; Pub. L. 106–419, title III, § 304, title IV, § 402(e), Nov. 1, 2000, 114 Stat. 1853, 1863; Pub. L. 107–103, title II, § 204(a), title V, § 504, Dec. 27, 2001, 115 Stat. 990, 995; Pub. L. 111–275, title VI, §§ 601(b)(2), 606, 607, Oct. 13, 2010, 124 Stat. 2884, 2886; Pub. L. 112–56, title II, § 262, Nov. 21, 2011, 125 Stat. 732; Pub. L. 112–260, title II, § 203, Jan. 10, 2013, 126 Stat. 2424; Pub. L. 113–146, title VII, § 703, Aug. 7, 2014, 128 Stat. 1797; Pub. L. 115–46, title IV, § 401, Aug. 12, 2017, 131 Stat. 969; Pub. L. 115–182, title V, § 509, June 6, 2018, 132 Stat. 1480; Pub. L. 116–315, title II, § 2013, Jan. 5, 2021, 134 Stat. 4980; Pub. L. 117–333, § 16, Jan. 5, 2023, 136 Stat. 6135.)

CITE AS: 38 USC 5503

§ 5504. Administration of trust funds

All cash balances in the personal funds of patients and the funds due incompetent beneficiaries trust funds administered by the Secretary, and all moneys received which are properly for deposit into these funds, may be deposited, respectively, into deposit fund accounts with the United States Treasury and such balances and deposits shall thereupon be available for disbursement for properly authorized purposes. When any balances have been on deposit with the Treasurer of the United States for more than one year and represent moneys belonging to individuals whose whereabouts are unknown, they shall be transferred and disposed of as directed in section 1322(a) of title 31.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1235, § 3204; Pub. L. 97–258, § 3(k)(5), Sept. 13, 1982, 96 Stat. 1065; renumbered § 5504, Pub. L. 102–40, title IV, § 402(b)(1), May 7, 1991, 105 Stat. 238; Pub. L. 102–83, § 4(a)(1), Aug. 6, 1991, 105 Stat. 403.)

CITE AS: 38 USC 5504

[§ 5505. Repealed. Pub. L. 103–446, title XII, § 1201(g)(4)(A), Nov. 2, 1994, 108 Stat. 4687]

CITE AS: 38 USC 5505

§ 5506. Definition of “fiduciary”
For purposes of this chapter and chapter 61 of this title, the term “fiduciary” means—
(1) a person who is a guardian, curator, conservator, committee, or person legally vested with the responsibility or care of a claimant (or a claimant’s estate) or of a beneficiary (or a beneficiary’s estate); or
(2) any other person having been appointed in a representative capacity to receive money paid under any of the laws administered by the Secretary for the use and benefit of a minor, incompetent, or other beneficiary.
(Added Pub. L. 108–454, title V, § 501(a)(1), Dec. 10, 2004, 118 Stat. 3617.)

CITE AS: 38 USC 5506

§ 5507. Inquiry, investigations, and qualification of fiduciaries
(a) Any certification of a person for payment of benefits of a beneficiary to that person as such beneficiary’s fiduciary under section 5502 of this title shall be made on the basis of—
(1) an inquiry or investigation by the Secretary of the fitness of that person to serve as fiduciary for that beneficiary, such inquiry or investigation—
(A) to be conducted in advance of such certification;
(B) to the extent practicable, to include a face-to-face interview with such person; and
(C) to the extent practicable, to include a copy of a credit report for such person issued within one year of the date of the proposed appointment;
(2) adequate evidence that certification of that person as fiduciary for that beneficiary is in the interest of such beneficiary (as determined by the Secretary under regulations); and
(3) the furnishing of any bond that may be required by the Secretary.
(b) As part of any inquiry or investigation of any person under subsection (a), the Secretary shall request information concerning whether that person has been convicted of any offense under Federal or State law which resulted in imprisonment for more than one year. If that person has been convicted of such an offense, the Secretary may certify the person as a fiduciary only if the Secretary finds that the person is an appropriate person to act as fiduciary for the beneficiary concerned under the circumstances.
(c)
(1) In the case of a proposed fiduciary described in paragraph (2), the Secretary, in conducting an inquiry or investigation under subsection (a)(1), may carry out such inquiry or investigation on an expedited basis that may include waiver of any specific requirement relating to such inquiry or investigation, including the otherwise applicable provisions of subparagraphs (A), (B), and (C) of such subsection. Any such inquiry or investigation carried out on such an expedited basis shall be carried out under regulations prescribed for purposes of this section.
(2) Paragraph (1) applies with respect to a proposed fiduciary who is—
(A) the parent (natural, adopted, or stepparent) of a beneficiary who is a minor;
(B) the spouse or parent of an incompetent beneficiary;
(C) a person who has been appointed a fiduciary of the beneficiary by a court of competent jurisdiction; or
(D) being appointed to manage an estate where the annual amount of veterans benefits to be managed by the proposed fiduciary does not exceed $3,600, as adjusted pursuant to section 5312 of this title.
(d)Temporary Fiduciaries.—When in the opinion of the Secretary, a temporary fiduciary is needed in order to protect the assets of the beneficiary while a determination of incompetency is being made or appealed or a fiduciary is appealing a determination of misuse, the Secretary may appoint one or more temporary fiduciaries for a period not to exceed 120 days. If a final decision has not been made within 120 days, the Secretary may not continue the appointment of the fiduciary without obtaining a court order for appointment of a guardian, conservator, or other fiduciary under the authority provided in section 5502(b) of this title.
(Added Pub. L. 108–454, title V, § 502(a), Dec. 10, 2004, 118 Stat. 3618.)

CITE AS: 38 USC 5507

§ 5508. Periodic onsite reviews of institutional fiduciaries

(Added Pub. L. 108–454, title V, § 504(a)(1), Dec. 10, 2004, 118 Stat. 3620.)

CITE AS: 38 USC 5508

§ 5509. Authority to require fiduciary to receive payments at regional offices of the Department when failing to provide required accounting
(a)Required Reports and Accountings.—The Secretary may require a fiduciary to file a report or accounting pursuant to regulations prescribed by the Secretary.
(b)Actions Upon Failure To File.—In any case in which a fiduciary fails to submit a report or accounting required by the Secretary under subsection (a), the Secretary may, after furnishing notice to such fiduciary and the beneficiary entitled to such payment of benefits, require that such fiduciary appear in person at a regional office of the Department serving the area in which the beneficiary resides in order to receive such payments.
(Added Pub. L. 108–454, title V, § 504(a)(1), Dec. 10, 2004, 118 Stat. 3621.)

CITE AS: 38 USC 5509

§ 5510. Annual report
The Secretary shall include in the Annual Benefits Report of the Veterans Benefits Administration or the Secretary’s Annual Performance and Accountability Report information concerning fiduciaries who have been appointed to receive payments for beneficiaries of the Department. As part of such information, the Secretary shall separately set forth the following:
(1) The number of beneficiaries in each category (veteran, surviving spouse, child, adult disabled child, or parent).
(2) The types of benefit being paid (compensation, pension, dependency and indemnity compensation, death pension or benefits payable to a disabled child under chapter 18 of this title).
(3) The total annual amounts and average annual amounts of benefits paid to fiduciaries for each category and type of benefit.
(4) The number of fiduciaries who are the spouse, parent, legal custodian, court-appointed fiduciary, institutional fiduciary, custodian in fact, and supervised direct payees.
(5) The number of cases in which the fiduciary was changed by the Secretary because of a finding that benefits had been misused.
(6) How such cases of misuse of benefits were addressed by the Secretary.
(7) The final disposition of such cases of misuse of benefits, including the number and dollar amount of any benefits reissued to beneficiaries.
(8) The number of fiduciary cases referred to the Office of the Inspector General and the nature of the actions taken by the Inspector General.
(9) The total amount of money recovered by the Government in cases arising from the misuse of benefits by a fiduciary.
(10) Such other information as the Secretary considers appropriate.
(Added Pub. L. 108–454, title V, § 505(a), Dec. 10, 2004, 118 Stat. 3621; amended Pub. L. 111–275, title X, § 1001(l), Oct. 13, 2010, 124 Stat. 2897.)

CITE AS: 38 USC 5510