VA Doesn't Have to Pay $350,000 in Benefits to Veteran's Estate - Employment Law - Federal Circuit
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VA Doesn't Have to Pay $350,000 in Benefits to Veteran's Estate

Two months before his death in 2005, the Secretary of Veterans Affairs awarded 100 percent disability benefits to Lee Richardson, a veteran. The benefits award was retroactive to March 10, 1986, and included approximately $350,000 in accrued benefits.

Richardson never received payment from the VA. Sharon Youngman, Richardson's fiduciary and curator, attempted to collect his benefits for distribution to his cousins, his only survivors.

Last week, the Federal Circuit Court of Appeals denied Youngman's request, concluding that Richardson's claim to the benefits was extinguished upon his death.

Youngman argued that, as fiduciary, she was entitled to receive the funds that the VA owed to Richardson before his death for distribution to his heirs, pointing out that Richardson was entitled to the funds and that they can be released to the fiduciary.

Under 38 U.S.C. § 5121(a), however, unpaid monetary benefits to which a veteran was entitled at death can only be paid to the individual's spouse, children, or dependent parents. In all other cases, accrued benefits can only be paid as necessary to reimburse a person who paid the expenses of the veteran's last sickness and burial.

No other payee categories are provided in the statute.

Youngman argued that the statute providing for payment of benefits was distinct from the restrictions on posthumous beneficiaries. The Federal Circuit Court of Appeals, however, reasoned that §5121 governs the distribution of accrued benefits "in all ... cases." While a fiduciary may stand in the shoes of a veteran, the statute does not grant the fiduciary rights beyond those of the veteran himself.

Here, Richardson died without any heirs in the categories qualifying under §5121 and Youngman didn't assert a claim for sickness or burial expenses. Thus, Richardson's unpaid benefits died with him.

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