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Effective: February 1, 2008 |
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19.45.05ar2 - Asset Assessment Determination (Archive) |
Archived: January 1, 2011 |
The first step in the asset assessment is to identify and evaluate the assets owned by the couple on the first day of the first continuous LTC/EW period. The next step is to determine the community spouse's asset allowance. If the assessment is completed before the request for MA payment of LTC services, the results of the asset assessment will provide an estimate of the community spouse asset allowance. The actual allowance must be calculated based on the minimum and maximum amounts in effect at the time the LTC spouse requests MA payment of LTC services.
Evaluate Effective Date Assets.
Determine the Community Spouse Asset Allowance.
When to Finalize the Community Spouse Asset Allowance.
Conversion of Assets from Excluded to Not Excluded.
Evaluate Effective Date Assets
The first step in the asset assessment determination is to evaluate the assets reported on the Asset Assessment Form (DHS-3340).
l Verify all assets included in the assessment owned on the effective date, regardless of whether they are counted or excluded. Assets must also be verified at initial application and the first yearly renewal.
l Do not consider the availability of an asset when making the asset assessment determination.
Exclude the following assets in the asset assessment determination:
n The homestead, including the land on which the home stands and other buildings on that land, regardless of value.
n Personal effects and household goods.
Note: Household goods include items of personal property found in or near the home that are used on a regular basis; and items needed by the householder for use, maintenance and occupancy of the home.
Personal effects include items of personal property that are worn or carried by an individual; and items that have an intimate relation to him or her.
n One vehicle, regardless of its use.
m Exclude the vehicle with the least equity.
n Capital assets necessary to operate a trade or business. See Self-Employment Excluded Assets.
n Up to $6,000 of the equity value of non-business property used to produce goods and services essential to daily activities.
n Up to $6,000 of the equity value of non-business, income-producing property that provides an annual return of at least 6% of the equity value.
See Self-Support Excluded Assets.
n One of the two below:
m The cash surrender value (CSV) of non-term life insurance policies with a total face value (FV) of $1,500 or less per person.
m The first $1,500 of an Irrevocable Burial Agreement (IBA) for people who do not have life insurance with a FV of $1,500 or less.
n Funds set aside for a burial space and burial space items for an individual, a spouse, and other members of the immediate family.
See Burials and Life Insurance for more information about how these assets are applied to the asset total.
n Retirement annuities funded by a pension fund or retirement plan unless the person can gain access to all or part of the funds.
Example:
Susan entered the LTCF two years ago on July 1. Her husband, Paul, resides in the community and is employed. He has a 401K plan through his employer. The plan allows him to withdraw $25,000 for medical emergencies. They completed an asset assessment.
Action:
Count the $25,000 toward the total countable assets for the asset assessment. Exclude the balance of the 401K plan.
n Other excluded assets.
Count an asset whether it is available or not. Count the equity value of all non-excluded assets in the asset assessment determination, including:
n Annuities that meet one of the following:
m Not annuitized.
m In the free look period.
m Have a commuted cash value.
n Trusts, except special needs trusts. Count the value of the trust on the day of the asset assessment.
n Burial funds, except as excluded above.
n Other non-excluded assets, such as cash, accounts, stocks, bonds, non-homestead real property, life estates and non-excluded vehicles.
Example:
Greg, age 72, entered a LTCF last month. His wife, Marge, age 71, sent in an asset assessment. Greg and Marge own a home and they transferred a cabin to their two children ten years ago, reserving a life estate for themselves. The children are unwilling to sell the cabin.
Action:
Exclude the home for the asset assessment because it is Marge’s residence.
Count both Greg and Marge’s life estate interests in the cabin in the asset assessment, even though these amounts are unavailable and would not count toward the asset limit for MA eligibility. Unavailability is not considered when determining total countable assets in an asset assessment.
n Retirement funds which contain a provision that allows the person to gain access to the funds in certain circumstances such as medical emergencies.
Note: Include the maximum amount available as a countable asset.
If you discover previously unreported assets at the time of application, revise the asset assessment to include those assets if they were owned on the effective date.
Determine the Community Spouse Asset Allowance
After verifying and evaluating the assets reported on the DHS-3340, the next step is to determine the community spouse asset allowance, which is also referred to as the spousal asset allowance.
Note: If the asset assessment is completed before the LTC spouse requests MA payment of LTC services, this determination will provide an estimate of the community spouse asset allowance. The actual amount will be finalized when the LTC spouse requests MA payment of LTC services.
There are three steps in this process:
1. Total the equity value of all non-excluded assets owned by either spouse on the effective date of the assessment. This is the couple’s total countable assets.
2. Divide the total countable assets in half.
3. Compare half of the total countable assets to the Minimum/Maximum Asset Allowance in effect at the time you complete the asset assessment determination.
If half of the total countable assets are:
n Less than the minimum asset allowance, the estimated community spouse asset allowance is the minimum asset allowance.
n More than the minimum asset allowance but less than the maximum asset allowance, the estimated community spouse asset allowance is half of the total countable assets.
n More than the maximum asset allowance, the estimated community spouse asset allowance is the maximum asset allowance.
The result of this calculation is an estimate of the assets the community spouse may retain should the LTC spouse apply for MA. This allows the couple to have an idea of how they might prepare to split their assets at the time of MA application. See Spousal Assets Determination for more information on how and when a couple should split assets.
l Do not require people to divide assets between spouses until the final figures are needed at MA application.
l There may be no advantage to the couple for the LTC spouse to transfer assets to the community spouse before a determination of MA eligibility, because all assets owned singly or jointly by both spouses are considered at the time of MA application.
Example (Part 1 of 3):
Ulysses has been in a LTCF since June 8, 2003. His wife, Helen, remains in the community. The couple completed an asset assessment in October 2003. The couple verified owning their home, two vehicles with equity values of $12,000 and $20,000, and a savings account with a balance of $18,000.
Action:
The effective date for the asset assessment is June 8, 2003. The worker completed an asset assessment determination based on assets owned on the effective date. The worker evaluated the assets determining that the house was excluded as a homestead and the $12,000 vehicle will be excluded.
1. The total countable assets at the time of the asset assessment were $38,000.
2. Half the total countable assets is $19,000.
3. The estimated community spouse asset allowance for Helen is $25,601, because half of the total countable assets is less than the $25,601 minimum for 2003.
If Ulysses applied for MA in 2003, Helen would be able to retain $25,601 of their $38,000 total countable assets.
When to Finalize the Community Spouse Asset Allowance
Determine the community spouse asset allowance at the time the LTC spouse first requests MA for payment of LTC services in Minnesota and is found eligible. The community spouse asset allowance is based on:
l The value of half the countable assets on the effective date of the asset assessment.
l The minimum/maximum asset allowance amounts in effect on the date of application.
Verify all assets at the time of application.
See Spousal Assets Determination for more information on how and when a couple should split assets.
Example (Part 2 of 3):
Helen applies for MA on March 10, 2005 for her husband, Ulysses, who is a LTCF resident. An asset assessment was completed shortly after Ulysses entered the LTCF on June 8, 2003. At the time of the asset assessment determination half the total counted assets were $19,000. The estimated community spousal asset allowance was the minimum asset allowance in effect at the time, or $25,601. The couple continues to own the assets they reported at the time of the asset assessment: their home; the two vehicles, which now have equity values of $10,000 and $18,000; and the savings account, which now has a balance of $12,000.
Action:
When processing the MA application the worker determines the community spouse asset allowance using the minimum and maximum allowances in effect on the date of application.
1. The total countable assets are currently valued at $30,000. This is the total of the vehicle with the highest equity and the savings account balance. The house and the vehicle with the lowest equity are excluded.
2. Half of the total countable assets on the effective date were $19,000.
3. On the effective date of the asset assessment determination the community spousal asset allowance was the minimum. The minimum in April 2005 is $26,898. Half the total countable assets on the effective date is less than the current minimum. The spousal asset allowance is the current minimum of $26,898.
Helen will be able to retain $26,898 of the $30,000 of countable assets. The remaining $3102 is considered available to Ulysses.
Conversion of Assets from Excluded to Not Excluded
When spousal assets that are not counted in the asset assessment because they are excluded are converted to a non-excluded status after the asset assessment, they must be included as a marital asset against the community spouse asset allowance.
Example:
George and Laura are a married couple. On June 1, 2007, George enters a nursing home where he remains for a continuous LTC/EW period. An asset assessment is completed on July 15, 2007, which identifies $150,000 in non-excluded assets belonging to George and Laura. The effective date of the asset assessment is June 1, 2007. The homestead, where Laura resided at the time of the asset assessment, was excluded. Laura has a community spouse asset allowance of $75,000. Based on the asset assessment, it is estimated that George must dispose of $72,000 before he becomes eligible for MA.
On December 1, 2007, Laura sells their home for $250,000 and moves into an apartment.
Action:
Laura has converted the home, which was excluded, to cash, which is not excluded for the purpose of determining MA eligibility. Laura’s community spouse asset allowance remains at $75,000. At the time that George requests MA payment of LTC services, consider all assets owned by George and Laura in excess of $75,000, including the proceeds from the sale of the home, to be available to pay for George’s LTC needs.