What To Do If Your House Plus Property Is more Than 2 Acres
What To Do If Your House Plus Property Is more Than 2 Acres
The applicant’s house plus two acres is an exempt asset. This means that the value of the house and up to two acres are not part of the net worth calculation.
If the land around the applicant’s primary residence is more than two acres, that extra acreage may not disqualify the veteran or surviving spouse from aid and attendance eligibility.
The Scenario
The applicant has a house that sits on a farm. The total land is 9 acres. The house and the first two acres are exempt. The township or county has a law that provides land can only be subdivided or sold in lots of at least 10 acres. Therefore, the property cannot be subdivided and the additional 7 acres won’t be included in the net worth calculation.
If the applicant has $110,000 in other assets (bank accounts, etc…) and each acre is worth $4,000, then the applicant still has assets totaling $110,000 because the 7 acres is now exempt because they can’t be sold. Despite having more than two acres, the applicant is still eligible for aid and attendance pension because net worth is under $150,538.
When submitting your application for VA benefits, you must include a letter from the township or municipality that reports the subdivision rules.
Failure to provide such a letter will results in a request for more information letter or a denial letter.
The letter from the township should look something like this:
“I have been requested to review the potential of subdividing your property at 123 Farm Road (Assessors Map 10, Lot 61). The property is located within the Residence C zoning district, which requires a minimum of 10 acres per lot. Since your property consists of only 9 acres, it falls short of the 10 acres that would be needed to divide the property into two lots.”
Potential Danger
However, if the applicant were to sell the primary residence, the value of the home could make the claimant ineligible unless proper planning is done before the house is sold. If you are thinking about selling the home, contact one of our VA accredited attorney’s and/or our senior real estate specialists. Selling the primary residence could cost the veteran or surviving spouse tens of thousands in VA benefits.
Scenario 2:
Even if the applicant has more than two acres of land, and the extra acreage could be subdivided and therefore sold, the applicant will still be eligible if net worth is less than $150,538.
If the land that can be sold is worth $50,000 and other assets including bank accounts and CD’s are worth another $50,000, then total net worth is under $150,538. This assumes that income is less or close to less than medical expenses.
In this scenario, you will need to provide the VA with a letter that documents the value of the land. This asset would be reported on VA Form 21P-0969.