Below is From the 2008 print edition of the US Code. Of course This has been on the books for a long time before 2008. Once again, someone has cherry picked some regulation and tried to make it something it is not.
It is also interesting that the actual letter this guy purports to have is nowhere to be found.
"§3.353 Determinations of incompotency and competency.
(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, includ- ing disbursement of funds without lim- itation.
( B) Authority. (1) Rating agencies have sole authority to make official determinations of competency and in- competency for purposes of: insurance (38 U.S.C. 1922), and, subject to § 13.56 of this chapter, disbursement of benefits. Such determinations are final and binding on field stations for these pur- poses.
(2) Where the beneficiary is rated in- competent, the Veterans Service Cen- ter Manager will develop information as to the beneficiary's social, economic and industrial adjustment; appoint (or recommend appointment of) a fidu- ciary as provided in § 13.55 of this chap- ter; select a method of disbursing pay- ment as provided in § 13.56 of this chap- ter, or in the case of a married bene- ficiary, appoint the beneficiary's spouse to receive payments as provided in §13.57 of this chapter; and authorize disbursement of the benefit.
(3) If in the course of fulfilling the re- sponsibilities assigned in paragraph ( B)(2) the Veterans Service Center Man- ager develops evidence indicating that the beneficiary may be capable of ad- ministering the funds payable without limitation, he or she will refer that evi- dence to the rating agency with a statement as to his or her findings. The rating agency will consider this evi- dence, together with all other evidence of record, to determine whether its
38 CFR Ch. I (7108 Edition)
prior determination of incompetency should remain in effect. Reexamination may be requested as provided in §3.327(a) if necessary to properly evalu- ate the beneficiary's mental capacity to contract or manage his or her own affairs.
© Medical opinion. Unless the med- ical evidence is clear, convincing and leaves no doubt as to the person's in- competency, the rating agency will make no determination of incom- petency without a definite expression regarding the question by the respon- sible medical authorities. Consider- ations of medical opinions will be in accordance with the principles in para- graph (a) of this section. Determina- tions relative to incompetency should be based upon all evidence of record and there should be a consistent rela- tionship between the percentage of dis- ability, facts relating to commitment or hospitalization and the holding of incompetency.
(d) Presumption in favor of competency. Where reasonable doubt arises regard- ing 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 pro- posed to make an incompetency deter- mination, the beneficiary will be noti- fied of the proposed action and of the right to a hearing as provided in § 3.103. Such notice is not necessary if the ben- eficiary 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. Fail- ure 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))"
"§ 3.353
Determinations of incompetency and competency.
(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 § 13.56 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 § 13.55 of this chapter; select a method of disbursing payment as provided in § 13.56 of this chapter, or in the case of a married beneficiary, appoint the beneficiary's spouse to receive payments as provided in § 13.57 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.
© 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]"
Look at the dates of these.
