(a) Definition of mental incompetency. A mentally incompetent person is one who because of injury or disease lacks the mental capacity to contract or to manage his or her own affairs, including disbursement of funds without limitation.
(b) Authority. (1) Rating agencies have sole authority to make official determinations of competency and incompetency for purposes of: insurance (38 U.S.C. 1922), and, subject to § 13.110 of this chapter, disbursement of benefits. Such determinations are final and binding on field stations for these purposes.
(2) Where the beneficiary is rated incompetent, the Veterans Service Center Manager will develop information as to the beneficiary's social, economic and industrial adjustment; appoint (or recommend appointment of) a fiduciary as provided in § 13.100 of this chapter; select a method of disbursing payment as provided in § 13.100 of this chapter, or in the case of a married beneficiary, appoint the beneficiary's spouse to receive payments as provided in § 13.100 of this chapter; and authorize disbursement of the benefit.
(3) If in the course of fulfilling the responsibilities assigned in paragraph (b)(2) the Veterans Service Center Manager develops evidence indicating that the beneficiary may be capable of administering the funds payable without limitation, he or she will refer that evidence to the rating agency with a statement as to his or her findings. The rating agency will consider this evidence, together with all other evidence of record, to determine whether its prior determination of incompetency should remain in effect. Reexamination may be requested as provided in § 3.327(a) if necessary to properly evaluate the beneficiary's mental capacity to contract or manage his or her own affairs.
(c) Medical opinion. Unless the medical evidence is clear, convincing and leaves no doubt as to the person's incompetency, the rating agency will make no determination of incompetency without a definite expression regarding the question by the responsible medical authorities. Considerations of medical opinions will be in accordance with the principles in paragraph (a) of this section. Determinations relative to incompetency should be based upon all evidence of record and there should be a consistent relationship between the percentage of disability, facts relating to commitment or hospitalization and the holding of incompetency.
(d) Presumption in favor of competency. Where reasonable doubt arises regarding a beneficiary's mental capacity to contract or to manage his or her own affairs, including the disbursement of funds without limitation, such doubt will be resolved in favor of competency (see § 3.102 on reasonable doubt).
(e) Due process. Whenever it is proposed to make an incompetency determination, the beneficiary will be notified of the proposed action and of the right to a hearing as provided in § 3.103. Such notice is not necessary if the beneficiary has been declared incompetent by a court of competent jurisdiction or if a guardian has been appointed for the beneficiary based upon a court finding of incompetency. If a hearing is requested it must be held prior to a rating decision of incompetency. Failure or refusal of the beneficiary after proper notice to request or cooperate in such a hearing will not preclude a rating decision based on the evidence of record.
(Authority: 38 U.S.C. 501(a))
[36 FR 19020, Sept. 25, 1971, and 40 FR 1241, Jan. 7, 1975, as amended at 42 FR 2069, Jan. 10, 1977; 58 FR 37856, July 14, 1993; 60 FR 55792, Nov. 3, 1995; 66 FR 48560, Sept. 21, 2001; 67 FR 46868, July 17, 2002; 68 FR 34542, June 10, 2003; 83 FR 32738, July 13, 2018]
Notes of Decisions
Mitchell E. Sims v. R. James Nicholson, 19 Vet. App. 453 (Vet. App. 2006).
· cites it 11× “In January 2004, the Board found that under 38 C.F.R. § 3.353 (2003) Mr. Sims lacked the mental capacity to contract or manage his own affairs, including disbursement of funds.”
Disabled Am. Vets. v. United States Dep't of Vets. Affairs, 962 F.2d 136 (2d Cir. 1992).
· cites it 2× “” 38 C.F.R. § 3.353 (1991). Section 3205(b) provides that, if veterans denied benefits subsequently are rated competent for a period of at least 90 days, they are entitled to payment of a lump sum in the amount denied pursuant to § 3205(a).”
William E. Freeman v. Eric K. Shinseki, 24 Vet. App. 404 (Vet. App. 2011).
· cites it 2× “38 C.F.R. § 3.353 (b)(1) (stating that the rating agency has authority to determine competency for purposes of insurance and disbursement of benefits).”
Watkins Law & Advocacy, PLLC v. DOJ, 78 F.4th 436 (D.C. Cir. 2023).
“A veteran or other beneficiary whom the VA determines “lacks the mental capacity to contract or to manage his or her own affairs, including disbursement of funds without limitation,” 38 C.F.R. § 3.353 (a), is considered “adjudicated as a mental defective” for purposes of the…”
Sheets v. U.S. Dep't of Vets. Affairs, 2002 WY 17 (Wyo. 2002).
· cites it 3× “See 38 C.F.R. § 3.353 . Subsequently, though Andrews continued to live in his Story, Wyoming home unassisted, on April 13, 1989, a Petition for Appointment of Conservator and Guardian was filed in the probate court of Sheridan County by Key Bank of Wyoming and Jack R.”
Zang v. Brown, 8 Vet. App. 246 (Vet. App. 1995).
· cites it 2× “354(a) as part of a general recodification of part 3 in 1961, the material regarding incompetency (immediately following the em *254 phasized “and”) was excised and moved in part to a definition of incompetency at 38 C.F.R. § 3.353 (a) (“one who because of injury or disease…”
Bailey v. Bailey, 677 S.E.2d 56 (Va. Ct. App. 2009).
“” 38 C.F.R. § 3.353 (a). The hospital discharged husband on July 18, two days after he signed the agreement.”
In Re Est. of Romero, 126 P.3d 228 (Colo. Ct. App. 2005).
“” 38 C.F.R. § 3.353 (a). The VA regulations, however, specifically provide that “[l]ack of testamentary capacity should not be confused with .”
Sanders v. Brown, 9 Vet. App. 525 (Vet. App. 1996).
· cites it 4× “38 C.F.R. § 3.353 (b) (1995). When a beneficiary is rated incompetent, the VA Veterans Services Officer (VSO) of jurisdiction will be informed of the possible necessity for the appointment or recognition of a fiduciary.”
In Re the Est. of Berg, 2010 SD 48 (S.D. 2010).
· cites it 6× “] On February 1, 1967, the VA declared Fred incompetent under 38 C.F.R. § 3.353 . That incompetency was “limited for purposes of insurance and disbursement of benefits.”
Montes Fam. v. Carter, 878 P.2d 1168 (Utah Ct. App. 1994).
· cites it 2× “§ 75-5-314 (1993). However, a Veterans Administration rating of incompetence means only that "because of injury or disease [the veteran] lacks the mental capacity to contract or to manage his or her own affairs, including disbursement of funds without limitation.”
Falter v. Vets. Admin., 632 F. Supp. 196 (D.N.J. 1986).
“See, 38 C.F.R. § 3.353 for administrative incompetency ratings procedures.”
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