## Chapter 1: Introduction

#### 1. Overview

+------------+---------------------------------------------------------+
| #####      | > The concept of protecting an incompetent              |
| a. History | > beneficiary's income and estate began long before     |
|            | > creation of the Department of Veterans Affairs and it |
|            | > continues to evolve. The following table reflects the |
|            | > progression of this initial concept to the service we |
|            | > currently provide our incompetent beneficiaries:      |
+------------+---------------------------------------------------------+

  ---------------- ------------------------------------------------------
  TIMEFRAME        EVENT

  Prior to Early   Central Offices of the Bureau of War Risk and United
  1920s            States Veterans Bureau are responsible for appointing
                   guardians by mail. Only court guardians are
                   recognized. No follow-ups are made.

  Early 1920s      Lack of capability to monitor estates or inquire into
                   beneficiary's living conditions results in courts'
                   dependence on guardian's own accounting of fund
                   management.

  1923 -- 1924     Congressional investigation launched. Findings reveal
                   unsatisfactory estate administration and fiduciary
                   negligence involving wards' living conditions.

  June 7, 1924     World War Veteran's Act establishes guardianship
                   activity under direction of US Veterans Bureau's
                   General Counsel with responsibility for supervision of
                   estates of incompetent beneficiaries to eliminate
                   waste and embezzlement. Regional attorneys at each
                   station carry out responsibility.

  1930             Congress transfers guardianship activity to newly
                   formed Veterans Administration (VA).

  1931             The office of Regional Attorney becomes that of Chief
                   Attorney.

  September 1953   Central Office (CO) reorganized. Agency's broad
                   responsibility to its incompetent beneficiaries moved
                   to Department of Veterans Benefits (DVB). Guardianship
                   Service is created.

  April 1973       Subsequent reorganization abolishes Guardianship
                   Service. Office of General Counsel assumes direct
                   organizational jurisdiction over Chief Attorney
                   functions pertaining to legal matters. Fiduciary
                   activity and its personnel remain in DVB.

  Mid-1970s        Field Examiners replace Field Attorneys in Fiduciary
                   certification and oversight.

  June 1973        Special task force completes intensive study resulting
                   in transfer of Field Examiners to Veterans Services
                   Division (VSD) and Estate Analysts to Finance
                   effective August 1, 1973.

  July 1, 1974     Estate Analysts and accounting audit function are
                   reassigned to VSD.

  January 1977     Fiduciary and Field Examination Staff established
                   within Veterans Assistance Services in Central Office.
                   Brings new attention to the program and gives support
                   and guidance to fiduciary activity.

  March 15, 1989   VA gains Cabinet level status becoming Department of
                   Veterans Affairs. F&FE Activity remains in VSD.

  Mid-1990s        VSD and Adjudication Divisions merge. Veterans Service
                   Center (VSC) formed. Technical expertise required of
                   the Estate Analyst results in upgrade in position and
                   change in title from Estate Analyst to Legal
                   Instruments Examiner. Many duties of the 2 divisions
                   are merged. F&FE Activity remains relatively
                   unchanged.

  Early 2000s      Public Contact Team (PCT) within VSC is formed.
                   Handles many functions formerly performed by VSD. F&FE
                   Activity becomes part of VSC Public Contact Team,
                   where it remains today.

  December 27,     Estate Limitation Law (formerly \$1500 Rule) repealed.
  2001             

  December 10,     Public Law 108-454 introduces new requirements for
  2004             qualifying fiduciaries, provides for remedies when a
                   fiduciary misuses an incompetent's funds, including
                   provisions for reissuance of misused funds in certain
                   circumstances. The law also required onsite review of
                   multiple fiduciaries.
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Continued on next page

1\. Overview, Continued

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| ##### b    | This chapter contains the following topics.             |
| . Contents |                                                         |
+------------+---------------------------------------------------------+

+--------+-------------------------------------------------+-----------+
| Topic  | Topic Name                                      | See Page  |
+--------+-------------------------------------------------+-----------+
| 1.     | Overview                                        | 1-1       |
+--------+-------------------------------------------------+-----------+
| 2.     | Program Responsibilities                        | 1-3       |
+--------+-------------------------------------------------+-----------+
| 3.     | Role of the Legal Instruments Examiner (LIE)    | 1-4       |
+--------+-------------------------------------------------+-----------+
| 4.     | \[Reserved\]                                    | 1-5       |
+--------+-------------------------------------------------+-----------+

####  

#### 2. Program Responsibilities

+------------+---------------------------------------------------------+
| ####       | > Fiduciary program responsibilities include            |
| # a. Summa |                                                         |
| ry of Prog | -   determining the best type of payee based on the     |
| ram Respon |     needs and circumstances of minors and incompetents, |
| sibilities |     as well as the level of protection indicated,       |
|            |                                                         |
|            | -   selecting and qualifying fiduciaries,               |
|            |                                                         |
|            | -   arranging for appropriate allowances to meet the    |
|            |     needs of beneficiaries and their dependents,        |
|            |                                                         |
|            | -   ensuring that VA benefits payable are appropriate   |
|            |     and taking necessary action when increases or       |
|            |     decreases are indicated or when there is potential  |
|            |     for additional benefits,                            |
|            |                                                         |
|            | -   advising the beneficiary and/or fiduciary of all    |
|            |     known potential federal and state benefits,         |
|            |                                                         |
|            | -   protecting income and funds from fraud, waste, and  |
|            |     misuse,                                             |
|            |                                                         |
|            | -   developing facts concerning misuse of beneficiary   |
|            |     funds, and                                          |
|            |                                                         |
|            | -   conducting onsite review of multi-fiduciaries.      |
+------------+---------------------------------------------------------+

#### 3. Role of the Legal Instruments Examiner (LIE)

+------------+---------------------------------------------------------+
| ##         | > Basic responsibilities of all LIEs include            |
| ### a. LIE |                                                         |
| 's Respons | -   securing timely accountings,                        |
| ibilities  |                                                         |
| - Overview | -   performing the timely analysis of accountings,      |
|            |                                                         |
|            | -   estate administration duties, and                   |
|            |                                                         |
|            | -   administrative duties.                              |
+------------+---------------------------------------------------------+

+-----------------------------------------------------------------------+
| > The LIE is responsible for quasi-legal and administrative duties    |
| > regarding the administration of the estates of incompetent          |
| > beneficiaries and the protection of their benefit entitlement.      |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| > The LIE should not attempt to provide professional advice or        |
| > assistance in purely legal matters. These issues must be referred   |
| > to the Regional Counsel for appropriate action.                     |
+-----------------------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##         | > The field examiner has exclusive responsibility for   |
| ### b. Sha |                                                         |
| red Respon | -   determining the best type of payee based on the     |
| sibilities |     needs and circumstances of minors and incompetents, |
|            |     as well as the level of protection indicated; and   |
|            |                                                         |
|            | -   selecting and qualifying fiduciaries.               |
+------------+---------------------------------------------------------+

+-----------------------------------------------------------------------+
| > The LIE however will often have knowledge of circumstances that     |
| > might affect the field examiner's decision. The LIE must            |
| > communicate this information to the field examiner in an            |
| > appropriate manner to ensure that the field examiner has all        |
| > available information when selecting a fiduciary.                   |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| > The protection of estates of minors and incompetent adult           |
| > beneficiaries rests largely on the judgment and knowledge of LIEs.  |
| > The LIEs share responsibility with supervisors and field examiners  |
| > for making administrative and quasi-legal determinations involving  |
| > the overall supervision of beneficiary estates and the protection   |
| > of benefit entitlement. All of these individuals establish and      |
| > maintain communication with VA's incompetent beneficiaries and      |
| > fiduciaries.                                                        |
+-----------------------------------------------------------------------+

+-----------------------------------------------------------------------+
| > The LIEs responsibilities often overlap those of the field examiner |
| > in the areas of fund usage, protection, fiduciary accountability,   |
| > and benefit entitlement. The LIE and the field examiner must work   |
| > as a team to fulfill the mutual responsibilities listed above.      |
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#### 4. \[Reserved\]

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| ##### a.   |                                                         |
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