**July 9,1976 M29-1,Part VI\
Change 1**

**CHAPTER 14. INITIATION OF CLAIM FOR INSURANCE-OTHER THAN**

**ROUTINE CASES**

**CONTENTS**

PARAGRAPH PAGE

14.01 General 14-1\
14.02 Determination of Beneficiary on NSLI Policies\
When Death Occurred Prior to August 1, 1946 14-1\
14.03 Insurance Payable to an Estate 14-1\
14.04 Initiation of Claim to an Executor or Administrator 14-2\
14.05 Initiation of Claim When No Executor Has Been or Will Be Appointed
14-2\
14.06 Assistance of District Counsel 14-3\
14.07 Initiation of Claim to a Minor or Incompetent 14-3\
14.08 Initiation of Claim to a Beneficiary Designated By a Will 14-3\
14.09 Initiation of Claim to a Trustee 14-4\
14.10 Initiation of Claim to a Corporation or Legal Entity 14-4\
14.11 Initiation of Claim for Matured or Pure Endowment 14-4

14-i

**May 27, 1980 M29-1, Part VI\
Change 3**

**CHAPTER 14. INITIATION OF CLAIM FOR INSURANCE-OTHER THAN ROUTINE
CASES**

**14.01 GENERAL**

a\. If, after completion of the VA Form 29-368d, Report of Status for
Settlement of Death Claims, the claims clerk cannot determine the
beneficiary or the case is one as outlined in chapter 3, paragraph
3.0lb, the case will be referred to the claims examiner for initiation
of the claim.

b\. Before a claim is invited, the claims examiner will carefully review
all the evidence in the

insurance folder to determine the intent of the insured in making the
beneficiary designation. Cases will not be adjudicated routinely. A
singular approach will be taken for each case and a decision will be
made based on the facts in the particular case.

c\. Basic questions as to the beneficiary designations will be resolved
before an invitation of claim is made andlor correspondence released
which may encourage a contested claim.

**14.02 DETERMINATION OF BENEFICIARY ON NSLI POLICIES WHEN DEATH
OCCURRED PRIOR TO AUGUST 1, 1946**

a\. When it is necessary to initiate a claim when the death of the
insured occurred before August l, 1946, and the insured failed to
designate a beneficiary within the permitted class (see ch. 16, par.
16.03a), a VA Form 29-541, Certificate Showing Residence and Heirs of
Deceased Veteran, will be released with a dictated letter to the next of
kin or other persons in a position to furnish the necessary information.

b\. The letter should emphasize the fact that all items listed on the VA
Form 29-541 must be answered in order that a proper determination can be
made as to the preferred beneficiary. The letter should also make it
clear that if there is no person in any one of the specified classes
listed, the word, None, should be entered.

**14.03 INSURANCE PAYABLE-TO AN ESTATE**

a\. Payment will not be initiated in any case in which there is any
doubt as to the existence of a relative legally qualified to inherit the
decedent\'s estate under the laws of the jurisdiction in which the
decedent was domiciled at the time of death. Payment to the estate of
the insured or the beneficiary will not be made if the sum payable will
escheat. If it later develops that amounts are bequeathed under a will
to nonrelatives, claims will be initiated \[in accordance with paragraph
14.04\].

b\. (Deleted.)

c\. NSLI policies that matured by death prior to August I, 1946, are not
payable to an estate. For NSLI policies which matured after that date,
insurance proceeds are payable to an estate when:

\(1\) The insured has designated his or her estate as beneficiary;

\(2\) The designated beneficiary did not survive the insured and there
are no other surviving beneficiaries;

\(3\) The insured had selected payment in a lump sum (option 1) but the
designated beneficiary elected some other mode and died before receiving
all the benefits due under such mode of settlement; in which case, the
present value of the remaining unpaid amount will be paid to the estate
of the beneficiary;

\(4\) The insured did not select a lump-sum payment and the designated
beneficiary, including contingent beneficiaries, died before receiving
all the benefits due and payable; in which case, the commuted value,
whether accrued or not, will be paid in one sum to the estate of the
insured.

d\. USGLI policies are payable to the estate of the insured only in
those cases in which the insured is not survived by a beneficiary.
Otherwise, the estate of the last surviving beneficiary is entitled to
the present value of any unpaid installments.

**14-1**

**M29-1, Part VI May 27, 1980**

**Change 3**

**14.04 INITIATION OF CLAIM TO AN EXECUTOR OR ADMINISTRATOR**

When administration is in order, the personal representative
(administrator, administratrix, or executor, executrix) of the estate of
the insured or beneficiary, will be requested to furnish the following:

a\. VA Form 29-41 25, Claim for One Sum Payment (all policy prefixes).

b\. (Deleted.)

c\. (Deleted.)

d\. Certified copy of letters of administration or letters testamentary
bearing the signature and seal of the appointing court.

e\. Certified copy of the public record of death unless death occurred
in service or in a VA or military hospital.

**14.05 INITIATION OF CLAIM WHEN NO EXECUTOR HAS BEEN OR WILL BE
APPOINTED**

a\. If no legal representative has been or will be appointed, the claim
will be developed under one of the following procedures:

\(1\) If no personal representative has been appointed, the VA will
determine the heirs of the decedent\'s estate. Payment will be made to
the person or persons entitled to the decedent\'s personal property
under the laws of the State of the decedent\'s domicile at the time of
death. The claim form as shown in paragraph 14.04 will be obtained from
each eligible heir.

\(2\) If, under the law of the decedent\'s domicile, the claimant is
unconditionally and directly entitled to an amount from the decedent\'s
estate independently of entitlement as a distributee at least equal to
the amount payable by the VA, the \$5,000 limitation does not apply and
payment will be made directly to the claimant. Under this paragraph,
reference will be made to the inheritance laws to determine the
claimant\'s status under the law of a particular State. If an allowance
is authorized under the law for which the claimant is unconditionally
entitled, having complied with the prescribed terms of the statute,
settlement of insurance up to the amount allowed under the law will be
authorized without a court decree.

\(3\) If administration is not raised, the heirs may petition the court
for a decree designating the distributees for their respective shares.
If there is a proper court order naming the proper distributee, payment
of the insurance can be made in any amount. The restrictive dollar
limitation will not apply in these cases. If there is any doubt as to
the validity of the court order, it will be referred to the local
District Counsel for a determination as to its authenticity. However, if
an interpretation of the court order is necessary, it will be sent to
the District Counsel in the regional office having jurisdiction over the
State where the court order was issued. A certified copy of the court\'s
decree is required and a claim form will be requested from each
distributee named in the court order.

b\. When the proceeds to an estate are payable in an amount of \$5,000
or less and it is indicated that no administration is to be raised and
settlement may not be authorized under the conditons set forth above,
the District Counsel of the regional office of jurisdiction will be
contacted to see if settlement can be made under the small estate
procedure under the laws of the State in which the decedent was
domiciled.

**14-2**

**July 9,1976 M29-1,Part VI\
Change 1**

**14.06 ASSISTANCE OF DISTRICT COUNSEL**

a\. It is essential that a proper acquittance be obtained upon
settlement of insurance cases. If there is controversy, either existing
or potential, a request for payment to anyone other than the personal
representative of the decedent\'s estate will be denied. If a claimant
or the representing attorney proposes that settlement be authorized to
the heirs under specific provisions of the probate code of a particular
State, the case will be referred to the District Counsel in that State
for an opinion as to whether an acquittance can be obtained upon payment
of the insurance as proposed. Settlement will be made based on the
District Counsel\'s opinion.

b\. In all estate cases involving the validity of a Decree of Descent or
similar document issued by a probate court, or if settlement is proposed
under the procedure in paragraph 14.05a(2) and the claimant\'s
eligibility to the-allowance under the particular probate law is
questionable, prompt action will be taken to refer the case to the
appropriate District Counsel for an opinion. Settlement or further
development will be made based on the District Counsel\'s opinion.

**14.07 INITIATION OF CLAIM TO A MINOR OR INCOMPETENT**

a\. If the beneficiary is a minor or an incompetent, a VA Form 21-592,
Request for Appointment of a Fiduciary, Custodian or Guardian, will be
prepared in duplicate. The original will be forwarded to the Veterans
Services Division of the regional office having jurisdiction over the
territory in which the beneficiary resides. When a fiduciary has been
appointed in some other jurisdiction, such information will be furnished
to the Veterans Services Division on the VA Form 21-592, together with
any available papers relating to the guardianship. If the beneficiary is
in a hospital for the insane and a fiduciary has not been appointed, the
request will be addressed to the Veterans Services Division of the
regional office having jurisdiction over the area in which the
institution is located. One copy of a claim form for each policy as
outlined in paragraph 14.04 and the proper Tables for Monthly Payments,
Options 2, 3, 4 and 5, in the VA Form 294125 series, will be forwarded
with the VA Form 21-592. The duplicate copy of VA Form 21-592 will be
filed in the insurance folder.

• b. The space provided on VA Form 21-592 for benefits payable will
reflect all VA benefits payable to the same beneficiary. If an award is
being withheld pending submission of additional evidence, information as
to the type and approximate amount of such benefits will be shown in the
remarks section.

c\. Under VA Regulation 1850(C), monthly installments of insurance
payable to a minor child or child permanently incapable of self-support
because of mental incompetency who is in custody of the natural,
adoptive or stepparent may be made to such parent as custodian bn behalf
of the child without certification by the Veterans Services Division.
The claim will be initiated directly to the parent having custody of the
minor or incompetent child except when:

\(1\) There is information of record that the parent is unfit;

\(2\) Guardianship is either in effect or proceedings are pending; or

\(3\) The insurance is payable in one sum.

d\. All cases in which the Veterans Services Division has been requested
to obtain appointment or furnish other information regarding appointment
of a fiduciary will be diaried for 45 days. If notice of the appointment
of a fiduciary or receipt of other requested information is not received
within the diary period, a followup request for the information will be
made and the diary date advanced.

**14.08 INITIATION OF CLAIM TO A BENEFICIARY DESIGNATED BY A WILL**

a\. The insured may designate beneficiaries by last will and testament.
However, a beneficiary may not be changed by last will and testament. If
the insured has not designated a beneficiary, the insured\'s estate will
not be considered as a beneficiary designation.

**14-3**

**M29-1,Part VI July 9,1976**

**Change 1**

b\. When information indicates that the insured left a will, or if there
is any indication that the insured was designating by will, it will be
necessary to obtain a copy of the will to ascertain whether a
beneficiary was designated. Under these conditions, VA regulations
require a duly probated will to establish a beneficiary designation.
However, the correspondent or claimant will not be put to the expense of
probating the will or furnishing a certified copy of the probated will
until it has been established that it contains an acceptable beneficiary
designation. When it is established that there is an acceptable
designation by will, the beneficiary will be furnished the appropriate
forms for claims. A certified copy of the last will and testament duly
admitted to probate will also be required.

**14.09 INITIATION OF CLAIM TO A TRUSTEE**

a\. The VA does not supervise the carrying out of provisions of trust
agreement and its responsibility ceases with payment to the trustee. As
long as there is a purpose of intent to establish a trust agreement, the
execution, terms, or the technical compliance with the manner of
creating a trust are not issues which are to be developed when
initiating a claim to a trustee. The intention of the insured controls
the disposition of insurance proceeds if it is not in violation of some
established principle. For example, if the insured designated a bank as
trustee to use the insurance proceeds for medical expenses for his or
her mother and the bank declines to accept the trust, the proceeds may
be paid directly to the mother.

b\. A trustee may not elect a lifetime option. Therefore, it is
necessary to modify the instructions to such beneficiaries so as to
restrict the election of payment to option l or 2.

**14.10 INITIATION OF CLAIM TO A CORPORATION OR LEGAL ENTITY**

Option 3 or 4 may not be selected if the beneficiary is a firm,
corporation or other legal entity (including the estate of the
insured-payable in one sum only). Instructions to such beneficiaries
will be modified as to available options.

**14.11 INITIATION OF CLAIM FOR MATURED OR PURE ENDOWMENT**

a\. The VA Form 29-368d will show whether all or any part of the
proceeds of a matured or pure endowment were paid to the insured.

b\. All potential rights of beneficiaries cease under the insurance
provisions of the policy when it matures as an endowment or a pure
endowment is payable.

c\. The insured, under an NSLI or USGLI policy issued on the endowment
plan, may at the date of maturity as an endowment, elect to receive
payment in monthly installments or as a refund life income in lieu of
payment in one sum. The insured has the right to designate the
beneficiary or beneficiaries to receive any remaining unpaid
installments at his or her death.

d\. If the insured dies before receiving all such monthly installments
and no designated beneficiary survives, the present value of the
remaining installments will be paid to the estate of the insured,
provided such payment will not escheat. The initiation of a claim to an
administrator, administratrix, executor, or executrix of an estate will
be made as outlined in paragraph 14.04.

e\. If the designated beneficiary of a matured endowment survives the
insured, the present value of any remaining unpaid installments will be
paid to the beneficiary in one sum, unless the insured or such
beneficiary elects to continue the installments under the option
selected by the insured.

f\. A dictated letter will be sent to the beneficiary advising the
amount of monthly installments, the period for which they are payable,
and the commuted value of the unpaid installments in one sum.

**14-4**