It is presumed there has been an improper transfer of assets when a transfer of income, non-exempt assets, real property and/or the homestead (see 1030.010.05 Homestead Exemption) which belong to an institutionalized person or his/her spouse, or both, for less than fair market value of the income or asset has been made by:
- An institutionalized person
- His/her spouse
- A person, including a court or an administrative body, with legal authority to act in place of or on behalf of the institutionalized person or the person’s spouse, or
- A person, relatives, friends, volunteers, and authorized representatives, including a court or an administrative body, acting at the direction or upon the request of the institutionalized person or the person’s spouse
It is considered an improper transfer of assets if an applicant/participant takes an action to avoid receiving income or assets s/he is entitled. Actions which would cause income or assets not to be received include, but are not limited to:
- Irrevocably waiving pension income
- Disclaiming an inheritance
- Not accepting or accessing injury settlements
- Diverting tort settlements into a trust or similar device, unless the trust is an excluded resource
- Refusing to take legal action to obtain a court-ordered payment that is not being paid, such as child support or alimony
- Refusing to take action to claim a legal portion of a deceased spouse’s or parent’s estate. Count the action as an improper transfer only if:
- The value of the abandoned portion is clearly identified
- There is certainty that a legal claim action will be successful
NOTE: This includes situations in which the will of the institutionalized person’s spouse precludes any inheritance for the institutionalized person. The institutionalized person must elect to take against the will. Refer to RSMo Section 474.160. Failure to elect to take against the may be considered a transfer of assets equal to the value of the portion of his/her spouse’s estate to which the institutionalized person would be entitled.
The purchase of certain types of assets, even at the fair market value, may be considered an improper transfer, such as:
- The purchase of a life estate interest in another individual’s home on or after February 8, 2006, is an improper transfer unless the purchaser resides in the home for a period of at least 12 consecutive months after the date of purchase (see 1040.020.30 Determining Fair and Valuable Consideration)
- The purchase or creation of a promissory note, loan or mortgage, on or after February 8, 2006 is an improper transfer unless such note, loan or mortgage meets several criteria (see 1040.020.30 Determining Fair and Valuable Consideration)
- The purchase of certain annuities may be considered an improper transfer (see 1040.020.35 Annuities Resulting in a Transfer of Property)
When assets that would cause ineligibility are transferred, it is presumed to have been transferred for the purpose of establishing or maintaining eligibility, unless the applicant/participant can provide convincing evidence that the transfer was made for some other purpose. Evidence will include documentation of the following:
- Intent to transfer the asset at fair market value (FMV) or other adequate compensation. To establish such an intent, the Family Support Division (FSD) must be provided with written evidence of attempts to dispose of the asset for fair market value as well as evidence to support the value (if any) of the disposed asset.
- The transfer is not made to qualify for vendor or Home and Community Based (HCB) benefits, continue to qualify, or avoid Estate Recovery. Convincing evidence must be presented regarding the specific purpose of the transfer. This evidence must not be based solely on the participant’s statement.
The following transfers for less than fair market value shall not be considered an improper transfer:
- The individual may transfer the home that is still considered the principal place of residence to:
- The individual’s spouse, provided:
- The transfer is for the sole benefit of the spouse; and
- The individual’s spouse does not subsequently transfer the home for less than fair market value; and
- Any transfer of the home by the spouse on or after the look-back date shall be reviewed by the administrative agency under the transfer of resources provisions in this rule; and
- The amount of the transfer is equal to one hundred per cent of the value of the property established by the county assessor at the time of the transfer, less any amount or portion of the property that is not transferred.
- His or her child under the age of twenty-one;
- His or her child age twenty-one or over who is blind or permanently and totally disabled as defined by Social Security Administration.
- The individual’s adult child who was residing in the home for at least two years immediately before the date the individual becomes institutionalized, and who provided care to the individual which permitted the individual to reside at home, rather than in an institution or facility. A “Level of Care (LOC) Assessment” must be completed to determine if the individual would have required institutionalization from the beginning and throughout the two-year period if the adult child had not provided personal care.
- The individual’s sibling who has an equity interest (must be a documented, legal interest) in the home and was residing in the home for at least one year immediately before the individual became institutionalized.
- The individual’s spouse, provided:
The individual may transfer resources other than a home as follows:
- To the individual’s spouse or to another for the sole benefit of the individual’s spouse.
- From the individual’s spouse to another for the sole benefit of the individual’s spouse.
- To the individual’s child, or to a trust established solely for the benefit of the individual’s child, who is blind or permanently and totally disabled as defined by Social Security Administration.
- To a trust established for the sole benefit of an individual under sixty-five years of age who is blind or permanently and totally disabled as defined by Social Security Administration.
NOTE: A “transfer for the sole benefit” is a transfer that cannot, under any circumstance, benefit any individual or entity except the spouse, blind or disabled child, or disabled individual, at the time of the transfer or at any time after the transfer.
In order for a transfer to be considered for the sole benefit of the spouse, blind or disabled child, or disabled individual, the entity that receives or holds the transferred resource must, by the explicit terms of a contract, trust, or other binding instrument, be required to expend all of the transferred resources for the benefit of the individual during that individual’s life expectancy. When the contract, trust or other binding instrument does not contain such a requirement, the provisions governing transfers for the sole benefit do not apply. A transfer for the sole benefit of the spouse, blind or disabled child or disabled individual in which there is a provision within the trust, contract or other binding instrument to expend all of the transferred resources may provide for other beneficiaries.
A trust may provide for reasonable compensation for a trustee to manage the trust, as well as for reasonable costs associated with managing the trust or managing the property held in the trust. In determining what is reasonable, the administrative agency shall consider the amount of time and effort involved in managing the trust, as well as the prevailing rate of compensation for trustees administering trusts of similar size and/or complexity.
- Any transfer between spouses in order to comply with the minimum spousal share allotment may not be applied inconsistently with the rules setting limits on the maximum spousal share or the minimum monthly maintenance needs allowance (MMMNA).
- Any amount of a couple’s resources exceeding the maximum spousal share must be used for the benefit of the institutionalized spouse and/or community spouse.
- Any amount of a couple’s resources exceeding the maximum spousal share may not be transferred to the community spouse or to another for the sole benefit of the community spouse unless permitted by an administrative hearing decision.
- Any amount of a couple’s resources exceeding the maximum spousal share may not be converted to another form for the purpose of generating additional income for the community spouse unless permitted in an administrative hearing decision.
Transfers in excess allowed by this policy, are presumed to be an improper transfer.