Claimant
(1) Claimant has the same meaning as defined in 3.275(a)(2)(i). (2) Covered asset means an asset that (i) Was part of a claimant's net worth; (ii) Was transferred for less than fair market value; and (iii) If not transferred, would have caused or partially caused the claimant's net worth to exceed the net worth limit under 3.274(a). (3) Covered asset amount means the monetary amount by which a claimant's net worth would have exceeded the limit due to the covered asset alone if the uncompensated value of the covered asset had been included in net worth. (i) Example 1. For purposes of this example, presume the net worth limit under 3.274(a) is $123,600. A claimant's assets total $115,900 and his annual income is zero. However, the claimant transferred $30,000 by giving it to a friend. If the claimant had not transferred the $30,000, his net worth would have been $145,900, which exceeds the net worth limit. The claimant's covered asset amount is $22,300, because this is the amount by which the claimant's net worth would have exceeded the limit due to the covered asset. (ii) Example 2. For purposes of this example, presume the net worth limit under 3.274(a) is $123,600. A claimant's annual income is zero and her total assets are $125,000, which exceeds the net worth limit. In addition, the claimant transferred $30,000 by giving $20,000 to her married son and giving $10,000 to a friend. The claimant's covered asset amount is $30,000 because this is the amount by which the claimant's net worth would have exceeded the limit due to the covered assets alone. (4) Fair market value means the price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. VA will use the best available information to determine fair market value, such as inspections, appraisals, public records, and the market value of similar property if applicable. (5) Transfer for less than fair market value means (i) Selling, conveying, gifting, or exchanging an asset for an amount less than the fair market value of the asset; or (ii) A voluntary asset transfer to, or purchase of, any financial instrument or investment that reduces net worth by transferring the asset to, or purchasing, the instrument or investment unless the claimant establishes that he or she has the ability to liquidate the entire balance of the asset for the claimant's own benefit. If the claimant establishes that the asset can be liquidated, the asset is included as net worth. Examples of such instruments or investments include (A) Annuities. Annuity means a financial instrument that provides income over a defined period of time for an initial payment of principal. (B) Trusts. Trust means a legal instrument by which an individual (the grantor) transfers property to an individual or an entity (the trustee), who manages the property according to the terms of the trust, whether for the grantor's own benefit or for the benefit of another individual. (6) Uncompensated value means the difference between the fair market value of an asset and the amount of compensation an individual receives for it. In the case of a trust, annuity, or other financial instrument or investment described in paragraph (a)(5)(ii) of this section, uncompensated value means the amount of money or the monetary value of any other type of asset transferred to such a trust, annuity, or other financial instrument or investment. (7) Look-back period means the 36-month period immediately preceding the date on which VA receives either an original pension claim or a new pension claim after a period of non-entitlement. This definition does not include any date before October 18, 2018. (8) Penalty period means a period of non-entitlement, calculated under paragraph (e) of this section, due to transfer of a covered asset.