§ 5502. — Payments to and supervision of fiduciaries.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 38USC5502]
TITLE 38--VETERANS' BENEFITS
PART IV--GENERAL ADMINISTRATIVE PROVISIONS
CHAPTER 55--MINORS, INCOMPETENTS, AND OTHER WARDS
Sec. 5502. Payments to and supervision of fiduciaries
(a)(1) Where it appears to the Secretary that the interest of the
beneficiary would be served thereby, payment of benefits under any law
administered by the Secretary may be made directly to the beneficiary or
to a relative or some other person for the use and benefit of the
beneficiary, regardless of any legal disability on the part of the
beneficiary. Where, in the opinion of the Secretary, any fiduciary
receiving funds on behalf of a Department beneficiary is acting in such
a number of cases as to make it impracticable to conserve properly the
estates or to supervise the persons of the beneficiaries, the Secretary
may refuse to make future payments in such cases as the Secretary may
deem proper.
(2) In a case in which the Secretary determines that a commission is
necessary in order to obtain the services of a fiduciary in the best
interests of a beneficiary, the Secretary may authorize a fiduciary
appointed by the Secretary to obtain from the beneficiary's estate a
reasonable commission for fiduciary services rendered, but the
commission for any year may not exceed 4 percent of the monetary
benefits under laws administered by the Secretary paid on behalf of the
beneficiary to the fiduciary during such year. A commission may not be
authorized for a fiduciary who receives any other form of remuneration
or payment in connection with rendering fiduciary services on behalf of
the beneficiary.
(b) Whenever it appears that any guardian, curator, conservator, or
other person, in the opinion of the Secretary, is not properly executing
or has not properly executed the duties of the trust of such guardian,
curator, conservator, or other person or has collected or paid, or is
attempting to collect or pay, fees, commissions, or allowances that are
inequitable or in excess of those allowed by law for the duties
performed or expenses incurred, or has failed to make such payments as
may be necessary for the benefit of the ward or the dependents of the
ward, then the Secretary may appear, by the Secretary's authorized
attorney, in the court which has appointed such fiduciary, or in any
court having original, concurrent, or appellate jurisdiction over said
cause, and make proper presentation of such matters. The Secretary, in
the Secretary's discretion, may suspend payments to any such guardian,
curator, conservator, or other person who shall neglect or refuse, after
reasonable notice, to render an account to the Secretary from time to
time showing the application of such payments for the benefit of such
incompetent or minor beneficiary, or who shall neglect or refuse to
administer the estate according to law. The Secretary may require the
fiduciary, as part of such account, to disclose any additional financial
information concerning the beneficiary (except for information that is
not available to the fiduciary). The Secretary may appear or intervene
by the Secretary's duly authorized attorney in any court as an
interested party in any litigation instituted by the Secretary or
otherwise, directly affecting money paid to such fiduciary under this
section.
(c) Authority is hereby granted for the payment of any court or
other expenses incident to any investigation or court proceeding for the
appointment of any fiduciary or other person for the purpose of payment
of benefits payable under laws administered by the Secretary or the
removal of such fiduciary and appointment of another, and of expenses in
connection with the administration of such benefits by such fiduciaries,
or in connection with any other court proceeding hereby authorized, when
such payment is authorized by the Secretary.
(d) All or any part of any benefits the payment of which is
suspended or withheld under this section may, in the discretion of the
Secretary, be paid temporarily to the person having custody and control
of the incompetent or minor beneficiary, to be used solely for the
benefit of such beneficiary, or, in the case of an incompetent veteran,
may be apportioned to the dependent or dependents, if any, of such
veteran. Any part not so paid and any funds of a mentally incompetent or
insane veteran not paid to the chief officer of the institution in which
such veteran is a patient nor apportioned to the veteran's dependent or
dependents may be ordered held in the Treasury to the credit of such
beneficiary. All funds so held shall be disbursed under the order and in
the discretion of the Secretary for the benefit of such beneficiary or
the beneficiary's dependents. Any balance remaining in such fund to the
credit of any beneficiary may be paid to the beneficiary if the
beneficiary recovers and is found competent, or if a minor, attains
majority, or otherwise to the beneficiary's guardian, curator, or
conservator, or, in the event of the beneficiary's death, to the
beneficiary's personal representative, except as otherwise provided by
law; however, payment will not be made to the beneficiary's personal
representative if, under the law of the beneficiary's last legal
residence, the beneficiary's estate would escheat to the State. In the
event of the death of a mentally incompetent or insane veteran, all
gratuitous benefits under laws administered by the Secretary deposited
before or after August 7, 1959, in the personal funds of patients trust
fund on account of such veteran shall not be paid to the personal
representative of such veteran, but shall be paid to the following
persons living at the time of settlement, and in the order named: The
surviving spouse, the children (without regard to age or marital status)
in equal parts, and the dependent parents of such veteran, in equal
parts. If any balance remains, such balance shall be deposited to the
credit of the applicable current appropriation; except that there may be
paid only so much of such balance as may be necessary to reimburse a
person (other than a political subdivision of the United States) who
bore the expenses of last sickness or burial of the veteran for such
expenses. No payment shall be made under the two preceding sentences of
this subsection unless claim therefor is filed with the Secretary within
five years after the death of the veteran, except that, if any person so
entitled under said two sentences is under legal disability at the time
of death of the veteran, such five-year period of limitation shall run
from the termination or removal of the legal disability.
(e) Any funds in the hands of a fiduciary appointed by a State court
or the Secretary derived from benefits payable under laws administered
by the Secretary, which under the law of the State wherein the
beneficiary had last legal residence would escheat to the State, shall
escheat to the United States and shall be returned by such fiduciary, or
by the personal representative of the deceased beneficiary, less legal
expenses of any administration necessary to determine that an escheat is
in order, to the Department, and shall be deposited to the credit of the
applicable revolving fund, trust fund, or appropriation.
(Pub. L. 85-857, Sept. 2, 1958, 72 Stat. 1232, Sec. 3202; Pub. L. 86-
146, Sec. 1(a), Aug. 7, 1959, 73 Stat. 297; Pub. L. 92-328, title I,
Sec. 105(a), June 30, 1972, 86 Stat. 395; Pub. L. 93-295, title III,
Sec. 301, May 31, 1974, 88 Stat. 183; Pub. L. 97-295, Sec. 4(77), Oct.
12, 1982, 96 Stat. 1311; Pub. L. 98-223, title II, Sec. 207(a), (b)(1),
Mar. 2, 1984, 98 Stat. 43; Pub. L. 99-576, title V, Sec. 505, title VII,
Sec. 701(76), Oct. 28, 1986, 100 Stat. 3287, 3297; renumbered Sec. 5502
and amended Pub. L. 102-40, title III, Sec. 305(a), title IV,
Sec. 402(b)(1), May 7, 1991, 105 Stat. 210, 238; Pub. L. 102-83,
Sec. 4(a)(1), (2)(A)(ix), (3), (4), (b)(1), (2)(E), Aug. 6, 1991, 105
Stat. 403-405.)
Amendments
1991--Pub. L. 102-40, Sec. 402(b)(1), renumbered section 3202 of
this title as this section.
Subsec. (a)(1). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted
``Secretary'' for ``Administrator'' in four places.
Pub. L. 102-83, Sec. 4(a)(3), (4), substituted ``Department'' for
``Veterans' Administration''.
Pub. L. 102-83, Sec. 4(a)(1), substituted ``administered by the
Secretary'' for ``administered by the Veterans' Administration''.
Subsec. (a)(2). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted
``Secretary'' for ``Administrator'' in two places.
Pub. L. 102-83, Sec. 4(a)(2)(A)(ix), substituted ``Secretary'' for
``Veterans' Administration'' before ``to obtain''.
Pub. L. 102-83, Sec. 4(a)(1), substituted ``administered by the
Secretary'' for ``administered by the Veterans' Administration''.
Subsec. (b). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted
``Secretary'' for ``Administrator'' and ``Secretary's'' for
``Administrator's'' wherever appearing.
Subsec. (c). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted
``Secretary'' for ``Administrator''.
Pub. L. 102-83, Sec. 4(a)(1), substituted ``administered by the
Secretary'' for ``administered by the Veterans' Administration''.
Subsec. (d). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted
``Secretary'' for ``Administrator'' in two places.
Pub. L. 102-83, Sec. 4(a)(2)(A)(ix), substituted ``Secretary'' for
``Veterans' Administration'' before ``within''.
Pub. L. 102-83, Sec. 4(a)(1), substituted ``administered by the
Secretary'' for ``administered by the Veterans' Administration''.
Pub. L. 102-40, Sec. 305(a), substituted ``a patient'' for ``an
inmate'' before ``such veteran is''.
Subsec. (e). Pub. L. 102-83, Sec. 4(a)(3), (4), substituted
``Department'' for ``Veterans' Administration'' after ``to the''.
Pub. L. 102-83, Sec. 4(a)(2)(A)(ix), substituted ``Secretary'' for
``Veterans' Administration'' after ``or the''.
Pub. L. 102-83, Sec. 4(a)(1), substituted ``administered by the
Secretary'' for ``administered by the Veterans' Administration''.
1986--Subsec. (a)(1). Pub. L. 99-576, Sec. 701(76)(A), substituted
``the Administrator'' for ``he'' before ``may deem proper''.
Subsec. (b). Pub. L. 99-576, Secs. 505, 701(76)(B), substituted
``the trust of such guardian, curator, conservator, or other person''
for ``his trust'' in first sentence, substituted ``the Administrator's''
for ``his duly'' in first sentence, substituted ``the Administrator's''
for ``his'' in second and third sentences, substituted ``the
Administrator'' for ``himself'' in third sentence, and inserted after
second sentence ``The Administrator may require the fiduciary, as part
of such account, to disclose any additional financial information
concerning the beneficiary (except for information that is not available
to the fiduciary).''
Subsec. (d). Pub. L. 99-576, Sec. 701(76)(C), substituted ``the
veteran's'' for ``his'' in second sentence, substituted ``the
beneficiary's'' for ``his'' in third sentence, and in fourth sentence
substituted ``the beneficiary'' for ``him'', ``the beneficiary'' for
``he'', and ``the beneficiary's'' for ``his'' in six places.
Subsec. (e). Pub. L. 99-576, Sec. 701(76)(D), struck out ``his''
before ``last legal residence''.
1984--Pub. L. 98-223, Sec. 207(b)(1), substituted ``fiduciaries''
for ``guardians'' in section catchline.
Subsec. (a). Pub. L. 98-223, Sec. 207(a), designated existing
provisions as par. (1) and added par. (2).
1982--Subsec. (d). Pub. L. 97-295 substituted ``August 7, 1959,''
for ``the date of enactment of this sentence''.
1974--Subsec. (a). Pub. L. 93-295, Sec. 301(a), among other changes,
substituted provisions authorizing the Administrator, where it appears
to him that the interests of the beneficiary would be served thereby, to
pay benefits directly to the beneficiary or to a relative or some other
person for the use and benefit of the beneficiary, regardless of any
legal disability on the part of the beneficiary, for provisions which
authorized payments to the guardians, curators, conservators, or persons
otherwise legally vested with the care or estate of the minor or of a
person mentally incompetent or under other legal disability, and
eliminated provisions which permitted payment of benefits direct to the
person entitled thereto prior to receipt of notice that such person is
under a legal disability adjudged by a court, and which permitted the
Administrator to determine the person legally vested with the care of
the claimant or his estate where no guardian, curator or conservator has
been appointed.
Subsec. (c). Pub. L. 93-295, Sec. 301(b), substituted ``fiduciary or
other person for the purpose of payment of benefits payable under laws
administered by the Veterans' Administration'' for ``guardian, curator,
conservator, or other person legally vested with the care of the
claimant or his estate'', and ``such benefits'' for ``such estates''.
Subsec. (e). Pub. L. 93-295, Sec. 301(c), substituted ``hands of a
fiduciary appointed by a State court or the Veterans' Administration
derived from'' for ``hands of a guardian, curator, conservator, or
person legally vested with the care of the beneficiary or his estate,
derived from'', and ``such fiduciary'' for ``such guardian, curator,
conservator, or person legally vested with the care of the beneficiary
or his estate''.
Subsecs. (f), (g). Pub. L. 93-295, Sec. 301(d), repealed subsec. (f)
which permitted the Administrator, in the case of any incompetent
veteran having no guardian, to pay compensation, pension or retirement
pay to the wife of such veteran for the use of the veteran and his
dependents, and subsec. (g) which permitted payment of death benefits to
a widow for herself and child or children, if any, notwithstanding that
she may be a minor.
1972--Subsec. (d). Pub. L. 92-328 inserted provisions relating to
filing for death benefit payments.
1959--Subsec. (d). Pub. L. 86-146 provided for payment, upon death
of an incompetent veteran, of gratuitous benefits deposited in the
personal funds of patients trust fund to surviving spouse, children or
parents, for deposit of balance to credit of applicable current
appropriation and for reimbursement of expenses of last sickness and
burial.
Effective Date of 1974 Amendment
Amendment by Pub. L. 93-295 effective first day of second calendar
month following May 31, 1974, see section 401 of Pub. L. 93-295, set out
as a note under section 1114 of this title.
Effective Date of 1972 Amendment
Amendment by Pub. L. 92-328 effective first day of second calendar
month which begins after June 30, 1972, see section 301(a) of Pub. L.
92-328, set out as a note under section 1114 of this title.
Effective Date of 1959 Amendment
Section 3 of Pub. L. 86-146 provided that: ``The amendments made by
this Act [amending this section and section 3203 [now 5503] of this
title] shall take effect as of the first day of the first calendar month
which begins more than ninety days after the date of enactment of this
Act [Aug. 7, 1959].''
Section Referred to in Other Sections
This section is referred to in section 3501 of this title.
