The means of establishing the date and value of a transfer
will depend on the type of asset transferred, as detailed below.
I. Assets other than bank accounts. A
transfer of assets occurs when:
A. title
(ownership) or legal interest to property has passed from the individual to a
third party. For example: Sole ownership of a home valued at $100,000 is
transferred to another. The value of the transfer is $100,000.
B. the individual establishes a joint
ownership, tenancy in common, joint tenancy or other similar arrangement, such
as adding a name to stocks, bonds, real property. In addition to legally
transferring part ownership, the individual has taken action which reduced or
eliminated their ownership or control of the remainder of the asset. The date
of the transfer is the date that the joint ownership was established. The
amount of the transfer is the total uncompensated value of the asset. For
example: In 10/95 the individual establishes joint ownership of his or her home
valued at $100,000. The value of the transfer is $100,000. The date of the
transfer is 10/95.
C. the asset is
converted from an accessible to an inaccessible asset. An example is when
assets are placed in an irrevocable trust.
D. the individual takes action to refuse the
receipt of assets.
E. unless
otherwise exempt, when the individual sells real property in exchange for a
promissory note, a transfer of assets must be assessed as follows:
1. if the individual sold property for less
than Fair Market Value (see Section 5), a transfer of assets has occurred
amounting to the difference between the sale price (the presumed value of the
note) and the value of the property. To determine the sale price the presumed
value of the note is used.
2. if
the current value of the note is less than the presumed value, the difference
between the two amounts is a transfer of assets.
The total amount of assets transferred due to (1) and (2)
above incurs a penalty, and the date of the transfer is the date the real
property is sold.
F. The purchase of a promissory note, loan or
mortgage will be considered a transfer of assets (see Chapter 332, Part 15)
unless the note, loan or mortgage:
1. has a
repayment term that is actuarially sound (as determined in accordance with
actuarial publications of the Social Security Administration, found online at:
http://www.ssa.gov/OACT/STATS/table4c6.html)
.
2. provides for payments to be
made in equal amounts during the term of the loan, with no deferral and no
balloon payments made; and
3.
prohibits the cancellation of the balance upon death of the lender.
If the conditions in 1, 2, and 3 above are not met, the value
of the transfer is the outstanding balance due on the note, loan or mortgage as
of the date of the individual's application for State-Funded Assistance.
II. With
bank accounts, a transfer of funds in an account is determined to take place
when:
A. funds deposited in a joint account
and owned by the individual (see Chapter 332, Part 16, Section 2.5), are
withdrawn by the other joint owner(s) from the account and used for other than
the sole benefit of the individual; or
B. another person's name is added to the
individual's account, the money in the account is owned by the individual, and
the intent of the individual in giving access is to convey ownership of those
funds. Intent to convey ownership must be documented with a clearly written
statement of intent to transfer the funds in the account to the joint owner.
This statement must be:
1. duly executed in
the presence of the notary public; and
2. signed by the individual at the time the
account was made joint or within a reasonable period of time, usually one week
but maybe longer due to circumstances beyond the control of the individual.
Note: Evidence of an intent to transfer the
funds in the account at the time that the name was added to the account will be
rebutted by evidence that the individual continued to use the
funds.
