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A beneficiary is an individual entitled to receive VA benefits. Beneficiaries are classified as minors, Veterans, and other adults. The latter group includes adult children incapable of self support prior to their eighteenth birthday, surviving spouses, dependent parents, and some insurance payees.

Corporate Surety Bond

A corporate surety bond is an agreement whereby an insurance company becomes liable for the performance of work or services provided by a fiduciary. If the fiduciary does not fulfill his/her responsibilities, the surety company is financially liable.

Court-Appointed Fiduciary

A court-appointed fiduciary is a person or legal entity appointed by a state or foreign court to supervise a beneficiary unable to manage his or her financial affairs and/or that person's estate. The statutory title of a court-appointed fiduciary may vary from state to state. Guardian, conservator, committee, trustee, or curator are the most commonly used titles. The appropriate title should be used as state law requires.

Federal Fiduciary

A federal fiduciary is a person or legal entity authorized by VA to serve as payee of VA benefits for a beneficiary unable to manage his or her financial affairs. The term federal fiduciary includes the following:

  • Spouse-Payee - An incompetent Veteran's spouse who is designated to administer the funds payable for the Veteran and other dependents, if any.
  • Legal Custodian - The person or legal entity designated by VA to manage VA funds on behalf of a beneficiary unable to manage his or her financial affairs.
  • Superintendent of Indian Reservation - A superintendent or other officer designated by the Secretary of the Interior to receive funds due an Indian beneficiary unable to manage his or her financial affairs.
  • Custodian-in-Fact - An emergency, temporary payee for a beneficiary incapable of managing his or her VA benefits, certified by VA when payments cannot be timely made to an existing or successor fiduciary, or when payment to such existing or successor fiduciary would be inappropriate under the circumstances.
  • Institutional Award Payee - The chief officer of an institution who is authorized the payment of all or part of the VA benefits due a Veteran who is incapable of managing his or her own financial affairs. The Veteran must be receiving hospital treatment or institutional, nursing, or domiciliary care in the facility. This method of payment is appropriate when VA benefits paid either adequately provide for the needs of the Veteran, or are not substantial enough to require another type of fiduciary.


An adult who is rated incompetent by VA or under legal disability by reason of court action as a result of an inability to manage his or her own financial affairs. Included in this definition are Veterans' children who are shown to be permanently incapable of self-support, prior to the age of majority.


38 U.S.C. 6106(b) defines misuse of benefits by a fiduciary as any case in which the fiduciary receives payment under any of the 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. Misuse is also considered when a fiduciary fails to provide adequate accountings.

Supervised Direct Pay Beneficiary

An incompetent adult beneficiary to whom benefits are paid directly when the facts indicate that he or she is capable of handling his or her financial affairs under continuing supervision of the fiduciary activity. If the beneficiary is a Veteran, that Veteran must be rated incompetent by VA.

Withdrawal Agreements

A three-party contract in which VA, the legal custodian, and a financial institution all agree that funds issued by VA for the beneficiary, are deposited into an account with the financial institution, and may be withdrawn only with the written consent of the Veterans Service Center Manager.