Fair Market Value (FMV) is a price quote of the prevailing price if offered on the open market.
2. Fair and valuable consideration may be identified by determining the FMV of genuine residential or commercial property as figured out by the Assessor in the county in which the residential or commercial property is situated, divided by the applicable portion; for (residential - 19%, agricultural - 12%, or commercial - 32%) - compared to the money or note received at the time of the transfer.

If present FMV of residential or commercial property can not be acquired and/or concurred upon utilizing this approach, make a decision based on all offered facts the applicant or recipient can provide, together with all info the FSD staff can acquire. Consider the purchase rate and year of purchase, depreciation and state of repair, insurance coverage assessment, appraisals made for the function of obtaining loans or mortgages, and known prices of similar residential or commercial property in the community.

1. Determine the market worth of possessions minus any debts or liens that overload the residential or commercial property's worth at the time of the transfer. Determine the quantity of cash or the value of other factor to consider (guarantee to pay, promissory note, etc) received in exchange for the possessions.

NOTE: This includes the value of a life estate withheld by the applicant/participant if real properties are transferred. Describe the Carlisle Table Appendix A - Determination of the Value of a Life Estate or Dower Interest to identify the worth of a life estate.

The applicant/participant needs to discuss and supply documents of the expense and disposition of funds received from the transfer to confirm it is not an offered resource to the applicant/participant.

1. Compare the 2 total up to figure out whether a sensible quantity was gotten by the individual. 'Reasonable amount' does not indicate the quantity received should equate to the assessed value. If in question, staff should seek advice from with a manager to determine what is reasonable. If the quantity is roughly the very same, it is identified fair worth was received.

Authentic Loans

If the individual states the transfer of money or securities was repayment of a loan, proof must be gotten with respect to the presence of an authentic loan arrangement. The concern of proof of the bona fide nature of the loan is with the individual.

A loan is bona fide if it satisfies requirements noted in IM Section 1040.015.10.05 Consideration of Certain Contracts.

If the documentation confirms the individual is/was repaying a bona fide loan, it does not affect eligibility on the element of inappropriate transfer of possessions. If the documents does not show the loan was bona fide, it will be thought about an inappropriate transfer of possessions or transfer without fair and important consideration.

Transfer of Assets Policy for Promissory Notes, Loans, or Mortgages

The Deficit Reduction Act of 2005 Section 6016 (c) changed Section 1917( c)( 1) of the Social Security Act 42 USC § 1396p( c)( 1 )( i) efficient February 8, 2006, including extra rules associated with the purchase of promissory notes, loans, or mortgages for people receiving MO HealthNet vendor level of care and HCB services. Policy located in sections 1040.000.00 Transfers of Residential Or Commercial Property, 1040.005.00 Legal Basis, and 1040.010.00 General Provisions applies to transfers that occurred prior to February 8, 2006.

Steps to consider:

1. Is the Note assignable?
2. What parties are involved?
3. What residential or commercial property? Has it already exchanged hands? Was it cash?

It is an improper transfer if an institutionalized person creates a promissory note prior to February 8, 2006, that has at least among the following:

- A provision that forgives a portion of the principal
- A balloon payment
- Interest payments just, with no principal payments, or
- An inadequate rates of interest (relative to present market rates) at the time the promissory note was created

Any funds (cash) used to purchase a promissory note, loan or mortgage on/or after February 8, 2006, shall lead to a transfer of possessions penalty unless all of the following criteria are met:

- The repayment term duration need to be actuarially sound
- Payments need to be made in equal amounts throughout the term of the loan and without any deferral of payments, early benefit, or balloon payments; and
- Promissory notes, loans, or mortgages need to restrict the cancellation of the balance upon death of the lender

If the note does not meet the "safe harbor" (3 requirements) listed above, consider the quantity transferred at the time the agreement was created.

- If the note is unassignable (non-negotiable) it has no market price, and the transfer penalty is calculated based upon the amount of money offered on the date the note was created minus payments got as of the date of the application.
- If the note is assignable (flexible), or does not discuss assignability/transferability, it can be sold however may still have no market price unless it is backed by a bank or other financial organization, or is authentic.

NOTE: Assume there will be a transfer penalty for the amount of the balance owed unless the note is assignable and evidence is provided the market value suffices to prevent a charge.

If staff is unable to determine eligibility utilizing the steps offered; personnel may send agreements for an Ask for Interpretation of Policy through the appropriate supervisory channels for Income Maintenance programs. Program and Policy staff will review to determine if the Promise to Pay, Promissory Note, or Residential Or Commercial Property Agreement is to be considered as income, a resource, and/or if a transfer of residential or commercial property has actually taken place without receiving reasonable and important consideration.

Personal Care Contracts

If the applicant/participant states the transfer of genuine estate, individual residential or commercial property, money or securities made after August 28, 2007, was for individual care, the following conditions need to be satisfied:

- There is a written arrangement between the private or people supplying services and the private getting care that defines the type, frequency, and period of the services to be supplied. It must be signed and dated on or before the date the services started;
- The services do not duplicate those which another party is being paid to supply;
- The specific getting the services has a documented need for the individual care services supplied;
- The services are important to avoid institutionalization of the individual receiving advantage of the services;
- Compensation for the services will be made at the time services are performed or within 2 months of the arrangement of the services; and
- The reasonable market value of the services provided prior to the month of institutionalization amounts to the reasonable market price of the possessions exchanged for the services.

NOTE: The reasonable market value for services provided shall be based on the present rate paid to service providers of such services in the county of home.

A Personal Care Contract is to render services to help keep individuals from becoming institutionalised. When considering whether fair and important consideration was received, personnel should figure out the worth of the services provided prior to the date the participant got in the nursing center, and that they amount to the reasonable market price of the possessions exchanged for the services.

A personal care agreement not fulfilling the conditions mentioned above is thought about to be a transfer of properties without getting reasonable and valuable consideration and goes through a penalty.

If there is any concern of whether fair and valuable consideration for the possessions was gotten in exchange for the personal care contract, a Request for Interpretation of Policy and a summary of the circumstance must be sent out to State Office Program and Policy Unit through the proper supervisory channels for Income Maintenance programs. Provide specific case details along with a copy of paperwork of the asset transfer and personal care contract.

EXAMPLE 1: Ellen Red gets in a nursing center on July 25, 2007. On September 01, 2007, Mrs. Red's child, Sara, participates in a Personal Care Contract with Mrs. Red. The contract states that Sara will prepare nutritious meals, clean Mrs. Red's home and do her laundry; help with grooming, bathing, dressing and individual shopping. Sara will also schedule social getaways for Mrs. Red and visit her weekly. Duties likewise include keeping track of Mrs. Red's physical and psychological condition and carrying out the instructions and directives of her participating in doctors. Sara has the duty of interacting with any health care service provider, long-lasting care facility administrator, social services, insurance coverage business and government workers in order to protect Mrs. Red's rights, benefits and assets.

On December 6, 2007, Sara, the Care Provider, submitted the agreement along with a petition for expenses with Court of probate. The exact same day the court awarded a payment of $12,000.00 to Sara as the conservator under the agreement. Sara pertained to the regional Family Support Office and looked for Medical Assistance Vendor Benefits for Mrs. Red on December 16, 2007. An application was sent in addition to a copy of the check for $12,000.00 dated December 14, 2007, and a copy of the Personal Care Contract.

In this scenario, the transfer of funds does not fulfill the conditions of reasonable and important factor to consider. Services rendered should be important to avoid institutionalization of the individual receiving benefit of the services. Sara's services started September 01, 2007; this seeks Mrs. Red's admission date of July 25, 2007. In addition, settlement for services need to be made at the time services are performed or within 2 months of the arrangement of services. Sara did not petition the court until December 2007 for the payment of services. Sara got payment for services supplied on December 14, 2007. Payment of Sara's services does not fall in the time frame of when services were rendered or within two months following. Therefore, the entire $12,000.00 is thought about a transfer of assets without receiving reasonable and valuable consideration.

EXAMPLE 2: Mr. Archie and his daughter, Millie, sign a Personal Care Contract on September 1, 2007, and $20,000.00 is transferred to Millie on November 1, 2007, for services rendered to Mr. Archie beginning September 1, 2007. In the composed arrangement Millie's duties and type of services are listed in addition to the frequency and duration of those services. There is a statement provided from Mr. Archie's physician verifying his need for the services. Mr. Archie entered a nursing facility on October 14, 2007, and got Medical Assistance Vendor Benefits on November 2, 2007.

A Personal Care Contract is to render services to assist keep people from becoming institutionalised. When thinking about whether reasonable and valuable factor to consider was received in exchange for the possessions moved the eligibility professional must take a look at the value of the services provided to Mr. Archie prior to the date he went into the nursing care facility to determine just how much of the $20,000.00 will be considered fair and important factor to consider and how much will be considered a transfer of possessions. The eligibility professional must identify if the services supplied to Mr. Archie prior to getting in the nursing facility amount to the fair market worth of the properties exchanged for the services. In Mr. Archie's county, the current rate paid to providers for such care is $75.00 per day. Millie looked after Mr. Archie from September 1st through October 13, 2007, which is 43 days. 43 days of care x $75.00 (existing rate paid to companies of such services in Mr. Archie's county of house) = $3225.00 fair and valuable consideration to Millie. The total value of the assets transferred to Millie was $20,000.00. Therefore, $16,775.00 ($20,000- $3,225.00) is considered as a transfer of assets without reasonable and important factor to consider.

Purchase of a Life Estate

A life estate is produced when a residential or commercial property holder transfers ownership of the residential or commercial property to somebody else and keeps the right to survive on the residential or commercial property and receive the earnings from it. The new owner of the residential or commercial property is referred to as the rest individual. The purchase of a life estate results in a transfer of property charge unless:

- Payment for the life estate is at or near the fair market price of the life estate as calculated in accordance with the Carlisle Table in Appendix A - Determination of the Value of a Life Estate or Dower Interest.

If payment goes beyond the reasonable market price the difference in between the amount paid and the reasonable market price is dealt with as a transfer of assets.

In addition to the requirement that the payment for a life estate be at or near the reasonable market value, the purchase of a life estate in another people' home occurring on or after February 8, 2006, results in a transfer of assets charge unless:

- The private buying a life estate in another individuals' home resides there for a duration of at least one year following the date of purchase.

If the individual does not reside there for at least one year following the date of purchase the entire quantity utilized to buy the life estate is dealt with as a transfer of properties.

EXAMPLE: Mr. Webster is 72 and resides in his son's home. Mr. Webster purchases a life estate in his boy's home for $39,000.00 on December 17, 2006. The value of his boy's home is $120,000.00. Using the Carlisle Table the value of the life estate is: $120,000.00 x 6%= $7200.00 x 5.424= $39,052.80. The life estate was acquired at or near fair market price. Mr. Webster enters a nursing center on January 21, 2007. Mr. Webster acquired the life estate on or after February 8, 2006 and did not reside on the residential or commercial property for at least one year following the purchase of the life estate. Therefore, the whole purchase amount is thought about a transfer of assets without fair and important consideration.