(a) Fee Forfeiture in Case of Benefit Misuse by Fiduciaries.—A fiduciary may not collect a fee from a beneficiary for any month with respect to which the Secretary or a court of competent jurisdiction has determined that the fiduciary misused all or part of the individual‘s benefit, and any amount so collected by the fiduciary as a fee for such month shall be treated as a misused part of the individual’s benefit.
Terms Used In 38 USC 6106
- 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
- Fiduciary: A trustee, executor, or administrator.
- individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See 1 USC 8
- 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.
(b) Misuse of Benefits Defined.—For purposes of this chapter, misuse of benefits by a fiduciary occurs in any case in which the fiduciary receives payment, under any of laws administered by the Secretary, for the use and benefit of a beneficiary and uses such payment, or any part thereof, for a use other than for the use and benefit of such beneficiary or that beneficiary’s dependents. Retention by a fiduciary of an amount of a benefit payment as a fiduciary fee or commission, or as attorney’s fees (including expenses) and court costs, if authorized by the Secretary or a court of competent jurisdiction, shall be considered to be for the use or benefit of such beneficiary.
(c) Regulations.—The Secretary may prescribe by regulation the meaning of the term “use and benefit” for purposes of this section.
