Fair Market Value (FMV) is a quote of the prevailing price if offered on the open market.
2. Fair and valuable consideration might be identified by calculating the FMV of genuine residential or commercial property as identified by the Assessor in the county in which the residential or commercial property lies, divided by the applicable portion; for (domestic - 19%, farming - 12%, or industrial - 32%) - compared to the cash or note got at the time of the transfer.

If existing FMV of residential or commercial property can not be gotten and/or concurred upon using this method, make a determination based upon all available truths the applicant or recipient can furnish, together with all information the FSD personnel can acquire. Take into account the purchase cost and year of purchase, devaluation and state of repair work, insurance coverage evaluation, appraisals made for the purpose of acquiring loans or mortgages, and recognized list prices of similar residential or commercial property in the community.

1. Determine the market value of assets minus any debts or liens that encumber the residential or commercial property's worth at the time of the transfer. Determine the amount of cash or the worth of other factor to consider (pledge to pay, promissory note, and so on) gotten in exchange for the assets.

NOTE: This consists of the value of a life estate withheld by the applicant/participant if real possessions are moved. Describe the Carlisle Table Appendix A - Determination of the Value of a Life Estate or Dower Interest to figure out the value of a life estate.

The applicant/participant needs to explain and provide paperwork of the expenditure and disposition of funds received from the transfer to verify it is not an available resource to the applicant/participant.

1. Compare the 2 quantities to determine whether a sensible quantity was received by the participant. 'Reasonable amount' does not indicate the quantity got need to equal the evaluated worth. If in question, personnel needs to consult with a manager to determine what is reasonable. If the quantity is roughly the very same, it is figured out fair value was received.

Bona Fide Loans

If the individual states the transfer of cash or securities was repayment of a loan, evidence must be gotten with regard to the existence of an authentic loan arrangement. The problem of proof of the bona fide nature of the loan is with the participant.

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

If the documentation confirms the individual is/was paying back a bona fide loan, it does not affect eligibility on the aspect of inappropriate transfer of assets. If the documents does not indicate the loan was bona fide, it will be considered an inappropriate transfer of assets or transfer without reasonable and important factor to consider.

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

The Deficit Reduction Act of 2005 Section 6016 (c) modified Section 1917( c)( 1) of the Social Security Act 42 USC § 1396p( c)( 1 )( i) reliable February 8, 2006, including additional rules connected to the purchase of promissory notes, loans, or mortgages for individuals getting MO HealthNet vendor level of care and HCB services. Policy located in areas 1040.000.00 Transfers of Residential Or Commercial Property, 1040.005.00 Legal Basis, and 1040.010.00 General Provisions uses to transfers that took place prior to February 8, 2006.

Steps to consider:

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

It is an inappropriate transfer if an institutionalised individual develops a promissory note prior to February 8, 2006, that has at least one of the following:

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

Any funds (cash) utilized to purchase a promissory note, loan or mortgage on/or after February 8, 2006, will lead to a transfer of properties penalty unless all of the following criteria are satisfied:

- The payment term period need to be actuarially sound
- Payments should be made in equivalent quantities during the term of the loan and with no deferral of payments, early reward, or balloon payments; and
- Promissory notes, loans, or mortgages should restrict the cancellation of the balance upon death of the loan provider

If the note does not meet the "safe harbor" (3 requirements) listed above, consider the amount moved at the time the contract was developed.

- If the note is unassignable (non-negotiable) it has no market value, and the transfer penalty is computed based upon the amount of money provided on the date the note was produced minus payments got as of the date of the application.
- If the note is assignable (flexible), or does not mention assignability/transferability, it can be offered but may still have no market price unless it is backed by a bank or other monetary 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 proof is offered the market worth suffices to avoid a penalty.

If personnel is not able to identify eligibility using the steps offered; personnel might send contracts for an Ask for Interpretation of Policy through the correct supervisory channels for Income Maintenance programs. Program and Policy personnel will review to determine if the Promise to Pay, Promissory Note, or Residential Or Commercial Property Agreement is to be thought about as income, a resource, and/or if a transfer of residential or commercial property has occurred without getting fair and valuable factor to consider.

Personal Care Contracts

If the applicant/participant states the transfer of realty, individual residential or commercial property, cash or securities made after August 28, 2007, was for individual care, the list below conditions should be satisfied:

- There is a written contract between the individual or people supplying services and the private receiving care that specifies the type, frequency, and period of the services to be supplied. It should be signed and dated on or before the date the services started;
- The services do not replicate those which another party is being paid to offer;
- The individual receiving the services has a documented need for the individual care services supplied;
- The services are vital to avoid institutionalization of the specific receiving advantage of the services;
- Compensation for the services shall be made at the time services are carried out or within two months of the arrangement of the services; and
- The reasonable market worth of the services supplied prior to the month of institutionalization amounts to the fair market value of the assets exchanged for the services.

NOTE: The reasonable market value for services offered shall be based upon the existing rate paid to service providers of such services in the county of residence.

A Personal Care Contract is to render services to help keep individuals from becoming institutionalized. When considering whether fair and valuable consideration was received, staff must figure out the worth of the services supplied prior to the date the participant got in the nursing center, which they are equal to the reasonable market value of the assets exchanged for the services.

A personal care agreement not fulfilling the conditions mentioned above is considered to be a transfer of assets without getting fair and valuable factor to consider and goes through a penalty.

If there is any concern of whether or not fair and important consideration for the possessions was received in exchange for the individual care agreement, an Ask for Interpretation of Policy and a summary of the circumstance should be sent to State Office Program and Policy Unit through the correct supervisory channels for Income Maintenance programs. Provide specific case details in addition to a copy of documentation of the asset transfer and personal care agreement.

EXAMPLE 1: Ellen Red gets in a nursing center on July 25, 2007. On September 01, 2007, Mrs. Red's daughter, Sara, gets in into a Personal Care Contract with Mrs. Red. The contract mentions that Sara will prepare healthy meals, tidy Mrs. Red's house and do her laundry; help with grooming, bathing, dressing and personal shopping. Sara will likewise set up for social outings for Mrs. Red and visit her weekly. Duties likewise consist of monitoring Mrs. Red's physical and psychological condition and performing the directions and instructions of her attending physicians. Sara has the obligation of communicating with any doctor, long-lasting care center administrator, social services, insurance coverage business and government employees in order to secure Mrs. Red's rights, advantages and properties.

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

In this circumstance, the transfer of funds does not fulfill the conditions of reasonable and important consideration. Services rendered must be necessary to avoid institutionalization of the individual receiving benefit of the services. Sara's services began September 01, 2007; this is after Mrs. Red's admission date of July 25, 2007. In addition, settlement for services must be made at the time services are performed or within 2 months of the provision of services. Sara did not petition the court until December 2007 for the payment of services. Sara received payment for services offered 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 getting fair and valuable consideration.

EXAMPLE 2: Mr. Archie and his child, 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 starting September 1, 2007. In the composed agreement Millie's duties and kind of services are noted together with the frequency and duration of those services. There is a declaration offered from Mr. Archie's physician confirming his requirement for the services. Mr. Archie got in a nursing facility on October 14, 2007, and obtained Medical Assistance Vendor Benefits on November 2, 2007.

A Personal Care Contract is to render services to help keep individuals from becoming institutionalized. When thinking about whether reasonable and valuable consideration was received in exchange for the possessions transferred the eligibility expert should take a look at the worth of the services offered to Mr. Archie prior to the date he entered the nursing care center to identify how much of the $20,000.00 will be thought about reasonable and valuable factor to consider and how much will be considered a transfer of possessions. The eligibility specialist must determine if the services supplied to Mr. Archie prior to getting in the nursing center are equivalent to the fair market value of the properties exchanged for the services. In Mr. Archie's county, the present rate paid to providers for such care is $75.00 daily. Millie took care of Mr. Archie from September 1st through October 13, 2007, which is 43 days. 43 days of care x $75.00 (existing rate paid to suppliers of such services in Mr. Archie's county of house) = $3225.00 fair and important consideration to Millie. The overall worth of the assets moved to Millie was $20,000.00. Therefore, $16,775.00 ($20,000- $3,225.00) is thought about as a transfer of properties 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 another person and keeps the right to reside on the residential or commercial property and get the earnings from it. The new owner of the residential or commercial property is referred to as the remainder person. The purchase of a life estate results in a transfer of possession penalty unless:

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

If payment surpasses the reasonable market price the distinction between the amount paid and the fair market worth is dealt with as a transfer of properties.

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

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

If the person does not live there for at least one year following the date of purchase the whole quantity used to acquire the life estate is dealt with as a transfer of possessions.

EXAMPLE: Mr. Webster is 72 and lives in his child's home. Mr. Webster purchases a life estate in his son's home for $39,000.00 on December 17, 2006. The value of his son'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 reasonable market price. Mr. Webster gets in a nursing facility on January 21, 2007. Mr. Webster purchased the life estate on or after February 8, 2006 and did not live on the residential or commercial property for at least one year following the purchase of the life estate. Therefore, the entire purchase quantity is thought about a transfer of assets without reasonable and valuable consideration.