38 CFR 13.130 – Bars to serving as a fiduciary
(a) An individual or entity may not serve as a fiduciary for a VA beneficiary if the individual or entity:
Terms Used In 38 CFR 13.130
- Arrest: Taking physical custody of a person by lawful authority.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Conviction: A judgement of guilt against a criminal defendant.
- Embezzlement: In most states, embezzlement is defined as theft/larceny of assets (money or property) by a person in a position of trust or responsibility over those assets. Embezzlement typically occurs in the employment and corporate settings. Source: OCC
- Fiduciary: A trustee, executor, or administrator.
- Forgery: The fraudulent signing or alteration of another's name to an instrument such as a deed, mortgage, or check. The intent of the forgery is to deceive or defraud. Source: OCC
- Fraud: Intentional deception resulting in injury to another.
- Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
(1) Misused or misappropriated a beneficiary’s VA benefits while serving as the beneficiary’s fiduciary;
(2) Has been convicted of a felony offense. For purposes of this paragraph, felony offense means a criminal offense for which the minimum period of imprisonment is 1 year or more, regardless of the actual sentence imposed or the actual time served. However, such conviction is not a bar to serving as a fiduciary for a beneficiary if all of the following conditions are met:
(i) The conviction occurred more than 10 years preceding the proposed date of appointment;
(ii) The conviction did not involve any of the following offenses:
(A) Fraud;
(B) Theft;
(C) Bribery;
(D) Embezzlement;
(E) Identity theft;
(F) Money laundering;
(G) Forgery;
(H) The abuse of or neglect of another person; or
(I) Any other financial crime;
(iii) There is no other person or entity who is willing and qualified to serve; and
(iv) The Hub Manager determines that the nature of the conviction is such that appointment of the individual poses no risk to the beneficiary and is in the beneficiary’s interest.
(b) An individual may not serve as a fiduciary for a VA beneficiary if the individual:
(1) Refuses or neglects to provide the authorization for VA disclosure of information prescribed in § 13.100(i);
(2) Is unable to manage his or her own Federal or state benefits and is in a Federal or state agency’s fiduciary, representative payment, or similar program;
(3) Has been adjudicated by a court with jurisdiction as being unable to manage his or her own financial affairs;
(4) Is incarcerated in a Federal, state, local, or other penal institution or correctional facility, sentenced to home confinement, released from incarceration to a half-way house, or on house arrest or in custody in any facility awaiting trial on pending criminal charges;
(5) Has felony charges pending;
(6) Has been removed as legal guardian by a state court for misconduct;
(7) Is under the age of majority; or
(8) Knowingly violates or refuses to comply with the regulations in this part.