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Effective: December 1, 2006 |
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19.40ar1 - Transfers (Archive) |
Archived: October 1, 2007 |
The transfer of an asset or income without adequate compensation may result in a period of ineligibility for all or some GAMC and MA services.
The transfer section of this manual will detail the policy needed to review transfers and determine potential ineligibility for services.
How Do You Discover a Transfer?
What Are the Steps in Processing a Transfer?
What Is the Penalty for an Improper Transfer?
A transfer occurs when a person gives away, sells, conveys ownership, and/or reduces control, or disposes of any asset or income or an interest in an asset or income.
Examples of transfers may include:
l Transferring the remainder interest in a life estate to another person.
l Annuitizing an annuity.
l Reducing or eliminating the person or the spouse's ownership or control of income or assets held in common with another person or persons.
l Placing an asset into joint ownership with another person, which reduces or eliminates the client’s ownership or control of the asset, or limits the client’s right to sell or dispose of the asset.
Example:
June owns her house with a net value of $100,000. Her sister moves into the house and June decides to put the house in both of their names. June’s sister does not reimburse June for any of the equity. June’s sister now has joint ownership of the house.
Action:
This is a transfer of an asset because it reduces the ownership of the house for June. She now owns only $50,000 of the equity of the house. The other $50,000 was transferred to her sister.
l Any action which causes an asset to which a person or a person's spouse is entitled not to be received by the person or the person's spouse. This includes:
n Waiving the right to or refusing to accept an inheritance, which is also known as refusing to elect against a will. The client may refuse an inheritance if doing so will result in greater income or assets.
Example:
Lester’s father died and left his estate to Lester. The estate included a dilapidated house and barn valued at $40,000. If Lester chose to accept the inheritance he would have to pay $50,000 in back taxes. Lester refused the inheritance.
Action:
This is not a transfer because the back taxes exceed the value of the property.
n Waiving pension income or diverting it to a trust or similar device for the benefit of another.
Example:
Angela assigned her pension income to go directly into a trust fund for her child. She does not have access to the income when it is in the trust.
Action:
This is a transfer of income.
n Refusing to take affordable legal action to obtain court-ordered payment that is not being paid. Examples include child support and alimony.
n Not accepting or taking action to obtain personal injury settlements.
n Diverting personal injury settlements by the defendant into a trust or similar legal device to be held for the benefit of the plaintiff, unless the exception for a disabled person applies.
n Purchasing any of the following on or after July 1, 2006:
m A loan, mortgage or promissory note .
m A life estate interest in another person's home.
See Purchases as Transfers for more information on these types of transfers.
Improper transfers are:
l Transfers not receiving adequate compensation.
l Made to obtain or maintain eligibility for GAMC or for payment of LTC or Waiver services.
Presume the purpose of a transfer is for this purpose unless the client gives convincing evidence it was exclusively for another purpose, except when:
n The assets transferred are between spouses. These should be evaluated based on spousal asset transfer rules.
n It meets a transfer exception.
Convincing evidence is evaluated on a case by case basis, and includes but is not limited to:
n Documentation that LTC services were not anticipated at the time of transfer.
n Physician’s statement, medical records or other documentation that the need for LTC services could not be reasonably anticipated at the time of the transfer.
n Other documentation of the circumstances of the transfer.
The following are always improper transfers if made to:
l Preserve the estate for the heirs.
l Avoid probate.
l Reduce taxes.
Example:
Ge, age 44, applies for MA payment of LTC services in August, the month he was admitted to the LTCF due to complications from a stroke. At the time of the application, he reports a transfer of $20,000 to his daughter made in May.
Action:
The worker determines a transfer penalty and notifies Ge of that penalty.
Ge’s wife, his authorized representative, contacts his worker immediately upon notification of the denial of LTC services. She states that Ge gave the money to his daughter to pay for her wedding and a down payment on a house.
Action:
The worker requests documentation to show that the transfer was not made to obtain or maintain MA eligibility.
A physician statement indicates Ge was in good health with no reason to anticipate a stroke, when he completed a physical in April.
Action:
Based on the evidence Ge could not anticipate the need for LTC services and the transfer was not made to obtain or maintain assistance. Ge’s eligibility for payment of MA LTC services is approved.
Transfers made by the community spouse after MA has been approved for the LTC or EW spouse are considered to have been done to maintain payment of LTC or Waiver services.
Note: Even though assets have been allocated to the community spouse, there is always a potential for the assets to become available to the LTC or Waiver spouse in the future.
If a community spouse of a LTC or Elderly Waiver client makes a transfer, require the community spouse to demonstrate that the transfer was done for a valid purpose that does not affect the LTC spouse’ MA eligibility.
How Do You Discover a Transfer?
Health care applications ask if anyone has transferred income or assets. The client must answer this question to be eligible for MA or GAMC.
Do not:
l Request information from a client regarding transfers unless there is evidence which indicates transfers have occurred, or the client or client’s representative have reported a transfer.
l Assume at application that a transfer has occurred.
l Automatically request information such as bank statements or tax returns for the months of the look back period.
There must be information reported and evidence presented before any such information is requested.
What Are the Steps in Processing a Transfer?
There are specific steps to follow when any of the following people make a transfer:
l The client.
l The client’s spouse.
l The client's representative on behalf of the client or client’s spouse.
Note: This includes a court or administrative body with legal authority to act in place of or on behalf of the person or spouse.
l A person, court or administrative body acting at the direction of or at request of the client or spouse.
The steps are:
1. Determine if the transfer meets a transfer exception.
2. Determine the transfer date.
3. Determine if the transfer took place during the look back period.
4. Determine the uncompensated value of the transfer. This step calculates whether a client has received adequate compensation.
5. Determine the transfer penalty for transfers with an uncompensated value that took place during the look back period.
6. The final step is to apply the transfer penalty.
If a penalty for an improper transfer causes undue hardship, a transfer penalty waiver may be appropriate.
What Is the Penalty for an Improper Transfer?
There are no transfer provisions for MinnesotaCare or GHO.
The policy in this section is for transfers occurring on or after July 1, 1988. For transfers made before July 1, 1988, please see Archived Transfer Information.
A person in a transfer penalty period is eligible for MA covered services except for the following:
l Skilled nursing facility care.
l Nursing facility care in an inpatient hospital.
l Intermediate care facility services.
l Services provided through the following home and community-based waivers:
n CADI.
n CAC.
n MR/RC.
n EW.
n TBI.
A person is ineligible for all GAMC services during the transfer penalty period.