Authorizing Awards for Fiduciary Cases

Overview

In This Section

This section contains the following topics:

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1. General Authorization Issues in Fiduciary Cases

Introduction

This topic contains general authorization issues in fiduciary cases, including

• outdated fiduciary appointments and certifications
• minor beneficiaries with multiple custodial parents
• handling
• irregularities in the names on documents in the claims folder, and
• a name change for a beneficiary, custodian, or fiduciary
• notifying a fiduciary hub (hub) of changes that may impact a fiduciary appointment or require a fiduciary adjustment
• handling retroactive awards
• between $10,000 and $25,000 to beneficiaries under fiduciary supervision, and
• to beneficiaries under fiduciary supervision that exceed $25,000
• regional office (RO) actions after a hub completes the review of a case involving a pending retroactive award that exceeds $25,000
• memorandum template to a hub requesting review of a case involving a retroactive award between $10,000 and $25,000, and
• sample memorandum to a hub requesting review of a case involving a pending retroactive award that exceeds $25,000.

Change Date

September 29, 2022

X.ii.6.E.1.a. Outdated Fiduciary Appointments and Certifications

Do not process an award to a guardian or other fiduciary

• based on a fiduciary hub (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 hub must provide either VA Form 21P-555, Certificate of Legal Capacity to Receive and Disburse Benefits and Fee Authorization, or other notice showing that the appointment or certification remains in full force and effect.

If VA Form 21P-555 is not of record, request it by preparing a VA Form 21P-592, Request for Appointment of a Fiduciary, Custodian or Guardian, and submitting it to the hub of jurisdiction.

X.ii.6.E.1.b. Minor Beneficiaries With Multiple Custodial Parents

If it appears more than one natural or adoptive parent is the custodian of a minor, refer this information to the hub of jurisdiction. The hub will advise which parent to pay.

If a current VA Form 21P-555 is not of record, request it by preparing VA Form 21P-592 and submitting it to the hub of jurisdiction.

Note: For the purpose of this section, a minor is an individual that has not yet reached the age of majority as set forth in M21-1, Part X, Subpart ii, 6.E.3.c.

X.ii.6.E.1.c. Handling Irregularities in the Names on Documents in the Claims Folder

The names of claimants and their custodians must match the names shown on

• the claimant’s application for benefits
• documents establishing the existence of a custodial relationship, and
• VA Form 21P-555.

If the names on the documents referenced in the preceding paragraph do not match, use the names on VA Form 21P-555 when processing an award as long as there is no question of identity. If there is a question of identity, request clarification from the hub of jurisdiction via e-mail.

X.ii.6.E.1.d. Handling a Name Change for a Beneficiary, Custodian, or Fiduciary

Use the table below to determine the actions to take upon receipt of a name change for a beneficiary, custodian, or fiduciary.

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X.ii.6.E.1.e. Notifying a Hub of Changes That May Impact a Fiduciary Appointment or Require a Fiduciary Adjustment

Use the table below to determine the actions to take when the regional office (RO) receives additional information, outside of the Centralized Mail (CM) portal process, that may

• impact a pending fiduciary appointment, or
• require a fiduciary adjustment.

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References: For more information on

• hub jurisdictions and contact information, see the M21-1, Part X, Subpart ii, 6.C.1.d, and
• screening and processing functions in the CM portal, see M21-1, Part II, Subpart i, 2.A.5.

X.ii.6.E.1.f. Handling Retroactive Awards Between $10,000 and $25,000 to Beneficiaries Under Fiduciary Supervision

Follow the steps in the table below when the amount of a retroactive award to a beneficiary under fiduciary supervision is between $10,000 and $25,000.

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References: For more information on

• sample memorandums, see M21-1, Part X, Subpart ii, 6.E.1.i, and
• hub jurisdictions and contact information, see M21-1, Part X, Subpart ii, 6.C.1.d.

X.ii.6.E.1.g. Handling Retroactive Awards to Beneficiaries Under Fiduciary Supervision That Exceed $25,000

When an RO’s authorization activity identifies a proposed retroactive award to a beneficiary under fiduciary supervision that exceeds $25,000, the authorization activity must

• upload a memorandum to the eFolder for the hub of jurisdiction to review to ensure all necessary protection and accounting requirements are in place prior to authorization of the award
• establish EP 290, FID-Fiduciary Adjustment, and
• e-mail the hub of jurisdiction requesting an expedited response due to a large pending retroactive award.

Important: ROs may not authorize the proposed retroactive award until the hub

• completes the bottom portion of the memorandum, and
• uploads the memorandum to the eFolder, and
• notifies the RO by e-mail that all necessary protection and accounting requirements are in place.

Notes:

• The proposed retroactive award must remain in pending authorization for the hub’s review and action.
• Use of the FID-Fiduciary Adjustment claim label allows NWQ to route the EP 290 to the appropriate hub for action.

References: For more information on

• a sample memorandum, see M21-1, Part X, Subpart ii, 6.E.1.j, and
• hub jurisdictions and contact information, see M21-1, Part X, Subpart ii, 6.C.1.d.

X.ii.6.E.1.h. RO Actions After a Hub Completes the Review of a Case Involving a Pending Retroactive Award That Exceeds $25,000

Use the table below to determine the actions an RO must take after a hub completes its review of the type of case described in M21-1, Part X, Subpart ii, 6.E.1.g.

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Note: When authorizing an award with retroactive benefits over $25,000, a third signature (concurrence) will be required by the Veterans Service Center Manager or designee no lower than a coach.

Reference: For more information on awards that require a third signature, see the VBMS Awards User Guide.

X.ii.6.E.1.i. Memorandum Template to a Hub Requesting Review of a Case Involving a Retroactive Award Between $10,000 and $25,000

The following is a memorandum template that the authorization activity must accurately complete and upload to VBMS for the hub of jurisdiction to review whenever it identifies a beneficiary who is

• under fiduciary supervision, and
• entitled to a retroactive award between $10,000 and $25,000.

X.ii.6.E.1.j. Sample Memorandum to a Hub Requesting Review of a Case Involving a Pending Retroactive Award That Exceeds $25,000

The following is a sample of the memorandum that the authorization activity must accurately complete and e-mail to the hub of jurisdiction for review and completion whenever it identifies a beneficiary who is

• under fiduciary supervision, and
• entitled to a retroactive award that exceeds $25,000.

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

• hub certification requirement for court-appointed fiduciaries
• authorizing an award for a certified fiduciary-payee, and
• references for special authorization procedures.

Change Date

February 8, 2021

X.ii.6.E.2.a. Hub Certification Requirement for Court-Appointed Fiduciaries

When a court appoints a guardian for an eligible beneficiary, do not make payments to the guardian until the hub furnishes a VA Form 21P-555.

After receiving court documents indicating the appointment of a fiduciary from anyone other than the hub,

• review the claims folder and corporate record to determine if a VA-appointed fiduciary is in place
• upload the court documents to the eFolder, and
• take action as outlined in the table below.

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X.ii.6.E.2.b. Authorizing an Award for a Certified Fiduciary-Payee

Follow the steps in the table below when a hub furnishes a VA Form 21P-555 to the authorization activity.

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Note: 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 the following claim types

• Integrated Disability Evaluation System
• Restricted Access Claims Center, and
• foreign residents.

X.ii.6.E.2.c. References for Special Authorization Procedures

For information on special authorization procedures for a(n)

• custodian recognized under 38 U.S.C. 5502, see M21-1, Part X, Subpart ii, 6.E.4.d, and
• institutionalized Veteran's award, see M21-1, Part X, Subpart ii, 6.F.

3. Controlling Awards for Children

Introduction

This topic contains information on controlling awards for children, including

• authority for determining minority status and the propriety of making direct payments to children
• establishing a diary when awarding benefits to a fiduciary for a minor
• age of majority by state/territory
• establishing a diary when awarding benefits to a fiduciary for a minor who is
• mentally incompetent, and
• attending school
• statutory change in the age of majority
• authorizing direct payment due to a statutory change in the age of majority, and
• retroactive benefits in an award to a child who has reached the age of majority.

Change Date

November 1, 2023

X.ii.6.E.3.a. Authority for Determining Minority Status and the Propriety of Making Direct Payments to Children

Determinations as to a beneficiary’s status as a minor and the propriety of making direct payments to children are governed by

• State law as to the age of attainment of majority
• 38 U.S.C. 5502, and
• 38 CFR 13.100(a)(3).

X.ii.6.E.3.b. Establishing a Diary When Awarding Benefits to a Fiduciary for a Minor

When an award is made to a fiduciary solely because the beneficiary is a minor, (including a fiduciary recognized under 38 U.S.C. 5502), 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.

When the diary expires,

• obtain the child’s current address
• prepare an award providing direct payment to the child, under 38 U.S.C. 5502
• establish an EP 400, FID-Correspondence which will be manually brokered to the hub of jurisdiction by the RO, and
• e-mail notification of the actions taken to the hub of jurisdiction.

Note: The establishment of an EP 400, FID-Correspondence is required at the time the diary expires regardless of payment status.

References: For more information on

• the age of majority, see M21-1, Part X, Subpart ii, 6.E.3.c, and
• establishing a diary control, see the VBMS Core User Guide.

X.ii.6.E.3.c. Age of Majority by State/Territory

Use the table below to determine the age of majority by State or U.S. territory.

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X.ii.6.E.3.d. Establishing a Diary When Awarding Benefits to a Fiduciary for a Minor Who Is Mentally Incompetent

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, complete and submit VA Form 21P-592 to the hub of jurisdiction.

Note: When preparing VA Form 21P-592

• furnish detailed information regarding the child’s mental status, and
• include any information regarding the suitability of a parent to act as the child’s custodian.

Reference: For more information on establishing a diary when awarding benefits to a fiduciary for a minor, see M21-1, Part X, Subpart ii, 6.E.3.b.

X.ii.6.E.3.e. 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 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 page in VBMS.

X.ii.6.E.3.f. 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: Hubs routinely identify beneficiaries under their jurisdiction that are affected by the enactment of a law that lowers the age of majority.

X.ii.6.E.3.g. 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 page in VBMS.

Exception: If payments are being made through a court-appointed fiduciary, refer the request for direct payment to the hub before making any change.

Reference: For more information on the actions to take when an age of majority diary expires, see M21-1, Part X, Subpart ii, 6.E.3.b.

X.ii.6.E.3.h. 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 they reach 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 U.S.C. 5502

Introduction

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

• when to authorize an award releasing payment of funds under 38 U.S.C. 5502
• authorizing an award under 38 U.S.C. 5502 for a minor child that has an apportionment claim pending
• authorizing an award under 38 U.S.C. 5502 when a minor child is eligible to receive benefits in their own right
• when not to release payment of funds under 38 U.S.C. 5502 for a minor child that has an apportionment claim pending
• when not to release payment of funds under 38 U.S.C. 5502 when a minor child is eligible to receive benefits in their own right
• handling the certification of a fiduciary after authorizing an award under 38 U.S.C. 5502, and
• actions to take when a custodian ceases to have custody of a child beneficiary.

Change Date

June 22, 2026

X.ii.6.E.4.a. When to Authorize an Award Releasing Payment of Funds Under 38 U.S.C. 5502

Per 38 U.S.C. 5502, make payments to a custodian on behalf of a minor child according to the instructions in M21-1, Part X, Subpart ii, 6.E.4.b and c 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.

Reference: For information on when to withhold a payment for a minor child, see M21-1, Part X, Subpart ii, 6.E.4.d and e.

X.ii.6.E.4.b. Authorizing an Award Under 38 U.S.C. 5502 for a Minor Child That Has an Apportionment Claim Pending

Follow the steps in the table below to authorize an award under 38 U.S.C. 5502 and notify the custodian.

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X.ii.6.E.4.c. Authorizing an Award Under 38 U.S.C. 5502 When a Minor Child Is Eligible to Receive Benefits in Their Own Right

Follow the steps in the table below to authorize an award under 38 U.S.C. 5502 and notify the custodian.

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X.ii.6.E.4.d. When Not to Release Payment of Funds Under 38 U.S.C. 5502 for a Minor Child That Has an Apportionment Claim Pending

Do not release payment of funds under 38 U.S.C 5502 when any of the following situations exist:

• the beneficiary is a child that is not in the custody of their natural or adoptive parent or stepparent
• a court-appointed guardianship or fiduciary appointment is pending
• the beneficiary is a Native American minor in the custody of a bonded officer of a Native American reservation, or
• a Veteran’s adult child is incapable of self-support by reason of incompetency under 38 U.S.C. 5502.

Follow the steps in the table below if an award of benefits is in order, but one of the situations described above exists.

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X.ii.6.E.4.e. When Not to Release Payment of Funds Under 38 U.S.C. 5502 When a Minor Child Is Eligible to Receive Benefits in Their Own Right

Some minors are eligible to receive benefits in their own right and do not have an apportionment pending. Do not release payment of funds under 38 U.S.C. 5502 when any of the following situations below exist:

• the beneficiary is a child that is not in the custody of their natural or adoptive parent or stepparent
• a court-appointed guardian or fiduciary appointment is pending
• the beneficiary is a Native American minor in the custody of a bonded officer of a Native American reservation, or
• a Veteran’s adult child is incapable of self-support by reason of incompetency under 38 U.S.C. 5502.

Follow the steps in the table below if an award of benefits is in order, but one of the situations described above exists.

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X.ii.6.E.4.f. Handling the Certification of a Fiduciary After Authorizing an Award Under 38 U.S.C 5502

In some cases, the custodian recognized by the authorization activity is found unsuitable to act in a fiduciary capacity. When this occurs, the 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 U.S.C 5502, and the hub subsequently certifies the same or a different person as fiduciary, make payments to the person certified by the hub.

Note: If the only action taken is the change or removal of a fiduciary, a notice of proposed adverse action is not required.

X.ii.6.E.4.g. 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 U.S.C. 5502 ceases to have custody of a child beneficiary, submit VA Form 21P-592 to the hub of jurisdiction.

When preparing the form,

• furnish 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 13.100

Introduction

This topic contains information on authorizing awards involving a Native American minor or incompetent adult under 38 CFR 13.100, including

• awards under 38 CFR 13.100 to a bonded officer of the Native American Reservation, and
• payee for awards authorized under 38 CFR 13.100.

Change Date

June 14, 2019

X.ii.6.E.5. a. Awards Under 38 CFR 13.100 to a Bonded Officer of the Native American Reservation

Under 38 CFR 13.100, 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 a VA Form 21P-592 to the hub for certification of the payee before processing the award.

References: For more information on requesting the appointment of a fiduciary for a

• minor beneficiary, see M21-1, Part X, Subpart ii, 6.C.1.a, and
• adult beneficiary, see M21-1, Part X, Subpart ii, 6.C.1.c.

X.ii.6.E.5. b. Payee for Awards Authorized Under 38 CFR 13.100

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 13.100. Enter the following instead: Bureau of Indian Affairs [name of agency or RO], for [name of Native American beneficiary].