VA Aid & Attendance can be a tremendous benefit for certain veterans who served during a period of war. There are income and asset limits for Aid & Attendance qualification. However, at the present time, there are no gift penalties and no look-back period. Although giving away all of your assets without the guidance of competent legal counsel can have disastrous effects, there are powerful planning opportunities for qualified veterans. But those planning opportunities will soon become more limited.
On January 23, 2015, the VA published a comprehensive rule that would amend the portion of the code of federal regulations that covers net worth, asset transfers, and income exclusions for needs-based benefits. One of the proposed changes would create a 3-year look-back period and a transfer penalty.
The VA did not initially give any guidance on when the proposed rules would come into effect. However, on October 6, 2016, a VA staff member stated that because of the complexity of the rule and the large number of comments received, the VA does not anticipate publishing the final rule before April 2017.
There is no indication as to whether the new rule would be retroactive or whether it would effect pending applications. Whether or not to use current planning tools is a decision that each applicant must make. But it is clear that VA planning will become much more difficult after the new rule is published.
UPDATE: The VA published its final rules on September 18, 2018. The scope of the new rules is beyond what can be posted here. Please seek updated information.