Veterans cautioned about benefit buyouts

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Veterans cautioned about benefit buyouts
By Chris Vaughn
Star-Telegram Staff Writer

In a twist on an age-old practice, Marc L. Lev is offering "top dollar" for
military pensions or veterans' disability checks.

Lev's proposition, sent out in mass emailings from his company, Trans World
Funding, is to trade eight years of benefit checks from the Defense
Department or Veterans Affairs Department for a lump sum.

The government and some veterans groups are less than enthusiastic about the

"A veteran should be very cautious about that deal," said Billy Green, a top
official in the Texas Veterans Commission, a state agency. "There's all
sorts of pitfalls out there."

Lev, a "diversified cash-flow consultant" and member of the American Cash
Flow Association, says the government and the veterans organizations "don't
understand the process or the product."

He said he has many clients who are thrilled with his offers and have used
the money to buy businesses, move across the country or purchase homes.

"I swear to you I have 1,700 applications on my desk," Lev said. "I am
literally flooded with applications."

Based on a person's age, health and credit history, Lev offers from 40 cents
to 90 cents on the dollar for eight years of benefit checks. For example,
someone receiving an $800 check a month could receive anywhere from $30,720
in cash to $69,120.

Cost-of-living increases from the government are kept by the retiree or
veteran, Lev said. But veterans must use a life insurance policy as
collateral in case they die during the eight years.

Neither the Pentagon nor the VA bars a retiree or veteran from cashing out
their benefits, but they don't encourage it.

VA officials in Washington said they are concerned that veterans who may be
having financial problems may accept such offers.

Ozzie Garza, a spokesman for the VA regional office in Dallas, said: "If a
veteran wants to do this, we can't stop him. But VA benefits are not
assignable to another party."

Lev said his company establishes a joint checking account with the retiree
or veteran. The money is deposited in the account each month and withdrawn
by Trans World Funding.

Peter Conlon Jr., a registered financial consultant in Arlington and a
retired Air Force officer, said he almost always discourages people from
cashing out their annuities, insurance policies or other long-term benefits,
especially if the offer comes by mass email.

"The downsides outweigh any positives," Conlon said. "Statistically
speaking, people who take lump sums tend to spend the money faster than they
need to, and then there's nothing down the road for them to live on."

Green, who supervises human resources at the Texas Veterans Commission, said
a disabled veteran should consider whether his monthly benefits are likely
to increase or decrease over the eight years.

Additionally, he said, a disabled veteran would probably have to pay income
tax on a buyout, whereas disability checks are tax-free.

"The VA determines service-connected disabilities, not the veteran," Green
said. "A veteran would have to be very careful before they did something
like that."
"When the way comes to an end, then change - having changed, you pass
through"  'I Ching'