Refer long term care cases with reported transfers totaling over $5,000 during the lookback period to Long Term Care - Asset Discovery Investigation (LTC-ADI). FCRCs will review reported transfers totaling $5,000 or less.
Date of Transfer
Example 1: Mr. A enters an LTC facility (NH or SLF) and applies for medical assistance in 02/12. He reports:
- a transfer from a revocable trust made in 01/07;
- a transfer from a revocable trust made in 12/07;
- transfers of money from a savings account, made in 12/06, 04/07, and 05/10.
Consider these transfers as follows:
- The transfer from a revocable trust made in 01/07 has a lookback period of 60 months, based on policy in effect before 01/01/12. It was made more than 60 months before 02/12. This transfer is allowable.
- The transfer from a revocable trust made in 12/07 also has a lookback period of 60 months. It was made less than 60 months before 02/12. Apply resource transfer policy (PM 07-02-20-b) to this transfer to determine whether it was allowable.
- When the transfer from a savings account as made in 12/06, the lookback period for all transfers except certain specified trusts was 36 months per policy then in effect. It was made more than 36 months before 02/12. This transfer is allowable.
- The 04/07 and 05/10 transfers were made less than 60 months before 02/12. Apply resource transfer policy (PM 07-02-20-b) to these transfers.
Example 2: Ms. B enters a LTC facility in 03/12. She transferred resources in 01/06, 02/07, 01/09 and 01/11.
The transfer from a bank account in 01/06 was made when the lookback period for this kind of transfer was 36 months (before 01/01/12). The 01/06 transfer was made more than 36 months before 03/12. This transfer is allowable.
The property transfer in 02/07 was made more than 60 months before the date of entry into the facility. It is an allowable transfer.
The transfers in 01/09 and 01/11 were made less than 60 months before entry into the facility. Apply transfer policy (PM 07-02-20-b) to these transfers to determine whether they affect eligibility.
Fair Market Value
When determining if fair market value was received, use judgment when comparing the fair market value of the transferred resources and the value received for the resources. If a person receives value for a transfer that is about the same as the fair market value, the transfer does not affect eligibility.
Example 3: Mr. C had $2,000 in the bank. Before applying, he purchased a $1,000 prepaid burial plan, a $500 vault and a $500 cemetery lot. This transfer does not affect eligibility because Mr. C received goods worth the amount of money he transferred.
Example 4: Property is appraised at $20,000. If it is sold for $18,500, the value received is approximately the same as the value on the open market. The transfer does not affect eligibility.
If the same property was sold for $8,000, it is clear that the value received is not equal to the value of the property on the open market. In this case, the reason for the transfer must be examined more closely.
When a person transfers resources to pay someone for services provided, they must show that the services were worth as much as the resource and provide documentation that payment for services was agreed to, in writing, prior to when the services were provided. To determine the worth of a service, use the average cost of that service from a provider on the open market. If the services were worth as much as the transferred resources/income, the transfer does not affect eligibility.
Example 5: Mrs. E, in the same month she enters an LTC facility, transfers $30,000 to her daughter. She states this is payment for services; her daughter has been doing grocery shopping, heavy housecleaning and other chores for her mother for 3 years prior to Mrs. E entering the nursing home, receiving no pay. They did not sign a contract specifying the services the daughter was to perform or what she would be paid. LTC-ADI determines that the transfer is not allowable.
Example 6: Mr. F loans $8,000 to his sister in 04/12. In 05/12, he enters an LTC facility and applies for medical assistance. At this time, no repayment has been made. The written agreement calls for monthly payments beginning in 07/12.
The loan is determined to meet the conditions of an allowable transfer, except for the repayment record. The transfer is provisionally deemed allowable. In 08/12, the caseworker verifies that the first repayment was made. The repayment amount is budgeted as income.
At redetermination in 04/13, the caseworker requests verification of loan repayments. The last payment was made in 10/12. As of 02/13, payments are delinquent 3 months. A balance of $6,000 remains unpaid. This balance is considered a transfer for less than FMV, as of 02/13; a penalty period is imposed beginning that month.
Example 7: In 10/09, Mr. G loans $10,000 to his brother after his brother declares bankruptcy and loses his home. The brother signs a promissory note stating that he will repay the money, plus interest, with equal monthly payments that will begin in 10/10.
In 10/10 the brother begins repaying the loan. He occasionally misses a payment or makes a payment of less than the agreed amount, but continues to make the payments fairly regularly over the next two years, and is never more than one month delinquent.
In 03/13, Mr. G's health deteriorates and he enters a nursing home and applies for medical assistance. The loan to his brother is reviewed. LTC-ADI determines that the loan meets the conditions for an allowable transfer. Payments received from the brother are budgeted as non-exempt income.
Allowable Types of Transfers
Life estate purchase
Example 8: Following the death of his wife in March 2010, Mr. H moved into his sister's home. He purchased a life estate interest in her home for $25,000. In April 2011 Mr. H suffered a stroke that left him unable to return home. Following his hospital stay, he entered a nursing home in May 2011. This transfer is allowable as Mr. H lived in his sister's home for 12 consecutive months after the purchase of the life estate.
Example 9: Every year from 2000 through 2010, Mr. P gave his 6 children $50 each for their birthdays. After entering the nursing home in March 2011, he began giving each child a $200 birthday gift. In December 2011, Mr. P applied for medical assistance. The $200 birthday gifts to each of Mr. P's children are not consistent with the amounts of gifts in the past. The transfers are not allowable.
Example 10: After her husband died in 06/10, Mrs. G arranged for her nephew to act as Power of Attorney to help manage her financial accounts. By 01/12, Mrs. G was unable to take care of herself in her home. Her nephew admitted her to a nursing home in 02/12 and told nursing home staff he would use money from Mrs. G's savings accounts to pay for her long term care. He paid for only the first two months of nursing home services and, after that, nursing home staff were unable to reach him at work, at his home, or at either of the telephone numbers he had provided. The nursing home helped Mrs. G apply for medical assistance in 6/12. The FCRC caseworker identified $24,000 in Mrs. G's savings account as of 10/11 but her nephew closed the account in 04/12. Because the transfer of Mrs. G's resources was involuntary, LTC-ADI determines it is allowable.
Transferred resources returned
If a penalty period has been established due to a transfer for less than FMV, and the transferred resources are returned in full, consider them returned as of the date that the penalty was imposed. Consider the transfer allowable; erase the penalty, and treat the resources as available as of the date the penalty was imposed.
If a transfer for less than FMV is returned only in part, this does not affect the allowability of the transfer. No action is taken; the returned resources are not budgeted as available to the customer.
Example 11: Ms. I, resident of an LTC facility since 01/11, transferred $45,500 to her nephew between 01/11 and 09/11, when she applied for medical assistance. An 8-month penalty period was imposed for these transfers, beginning in 09/11. Her nephew returns $20,000 to her in 10/11. This is a partial return of transferred resources; no action is taken. The penalty period is not changed, and the $20,000 is not counted as a resource available to Ms. I. She has no resource spenddown.
Example 12: Ms. I, resident of an LTC facility since 01/11, transferred $45,500 to her nephew between 01/11 and 09/11, when she applied for medical assistance. An 8-month penalty period was imposed for these transfers, beginning in 09/11. Ms. I's nephew returns the entire $45,500 to her in 01/12.
Because the transferred resources have been returned in full, they are considered returned as of 09/11, the date the penalty was imposed. The penalty is eliminated; the $45,500 is considered available as of 09/11. Ms. I's eligibility for 09/11 and subsequent months is reviewed:
- In the month of 09/11, Ms. I had $2,500 in savings. Adding the returned $45,500 to that, and deducting her $2,000 disregard, gives her a resource spenddown of $46,000 for that month.
- For each month thereafter, her resources are reduced by the amount required to pay the nursing home charges, after using all available income.
- Effective the month these reduced resources, plus Ms. I's budgetable income, are less than the state payment rate at her facility, she will become eligible for medical assistance for her LTC charges.