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Revision 09-4; Effective December 1, 2009
For treatment of all transfers of assets, consider common elements to transfer, including but not limited to, the following:
- Look-back period
- Person participation in transfers
- Exceptions to the transfer of assets
- Spouse-to-spouse transfers under spousal impoverishment provisions
- Rebuttal of the presumption
- Compensation
- Undue hardship
- Return of transferred asset
See policy beginning in Chapter I, Transfer of Assets.
F-3810 Transfer of an Excluded Home Cancels the Exclusion
Revision 09-4; Effective December 1, 2009
If a person who is not living in the home transfers ownership of his/her home for less than market value while it is excluded because of his intent to return, the transfer automatically nullifies the exclusion.
Ownership of property is evaluated as of 12:01 a.m. on the first day of the month. Changes related to resources after the first day of the month become effective as of 12:01 a.m. on the first day of the following month.
Example: Mr. Holmes owns a home. The value of the home is excluded from countable resources because of intent to return. During the middle of this month, Mr. Holmes transfers full ownership in his home to his grandson. Resource value of the home for this month is $0 because as of 12:01 a.m. the home was an excluded resource. Resource value of the home for next month is $0 because Mr. Holmes no longer has ownership in the home. After evaluating the transfer of the home to the grandson, this transfer does not meet any of the exceptions for a transfer outlined in Chapter I, Transfer of Assets, for exceptions to the transfer of assets. First, consider Mr. Holmes' equity value in the home as of 12:01 a.m. this month. Next, consider the amount of compensation Mr. Holmes received. The difference is the uncompensated value of the transfer on which the penalty would be based.
F-3811 Person Retains Some Interest
Revision 09-4; Effective December 1, 2009
Because ownership of property may be in whole or in part, if the person owns a home and gives it away during the look-back period, but retains an undivided partial interest or life estate in the property, evaluate the transaction for transfer of assets.
First, consider the person's equity value in the home as of 12:01 a.m. during the month of transfer. Next, consider the value of the retained undivided partial interest or life estate effective as of 12:01 a.m. during the month of transfer. The difference between the equity value and the value of the retained undivided partial interest or life estate is the presumed uncompensated transfer.
To determine the value of the retained undivided partial interest or life estate, take the following steps:
- Use the age of the person at the time of transfer.
- Use Appendix X, Life Estate and Remainder Interest Tables, to find the corresponding life estate interest factor.
- Multiply the corresponding life estate interest factor by the person's equity value in the home as of 12:01 a.m. during the month of transfer.
- The result is the value of the life estate.
- Subtract the equity value from the life estate value for the presumed uncompensated amount of transfer.
Example: Mr. House's equity value in the home as of 12:01 a.m. during the month of transfer was $200,000. Mr. House was age 72 during the month of the transfer. The corresponding life estate interest factor is .57261. The value of the life estate at the time of transfer is $200,000 × .57261 = $114,522. The difference between the equity value and the life estate is $200,000 − $114,522 = $85,478 presumed uncompensated transfer.
A person has a right to rebut the determination of the value of the retained undivided partial interest or the life estate as well as the presumed uncompensated transfer.
If the person owns a home and gave it away before the look-back period, but retained an undivided partial interest or life estate in the property, the person may be able to exclude the life estate based on the exclusions allowable for a home discussed in Section F-3100, The Home and Resource Exclusions.
See Appendix XVI, Documentation and Verification Guide.