Morris v. Shinseki, 26 Vet.App. 494 (Mar. 20, 2014)
ACCRUED BENEFITS UNDER 38 U.S.C. § 5121(a) & STATE LAW
38 U.S.C. § 5121 limits the classes of individuals qualified to receive a deceased veteran’s accrued VA benefits to surviving spouses, dependent children, or dependent parents. This federal law preempts state law that would allow siblings to inherit.
Prior to the veteran’s death, VA determined that he was incompetent to handle his VA benefits. VA recognized his brother as legal custodian and fiduciary, but withheld $75,0000 in unpaid benefits until the brother obtained an $85,000 surety bond. The veteran passed away before the brother secured the bond. The brother sought to obtain the $75,000 in unpaid “accrued benefits” from VA, and VA denied the claim, noting that he had never obtained the surety bond and that he was not an eligible accrued-benefits claimant under 38 U.S.C. § 5121. The brother appealed, arguing that section 5121 does not preempt state laws of descent, specifically Georgia law that would have allowed him to inherit his late brother’s estate. The CAVC assessed this argument under three circumstances in which federal law supersedes state law – express preemption, field preemption, and conflict preemption. The Court determined that section 5121 conflicted with state law in this case, and, therefore, preempted it.