Disqualifying Transfers 510-05-80

 

Definitions 510-05-80-05

(Revised 4/1/05 ML #2962)

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(N.D.A.C. Section 75-02-02.1-33.1)

 

For purposes of this section:

  1. Assets or income an individual disposes of means assets or income to which the individual is entitled, or would be entitled if action, or inaction, causes the individual  to not receive the asset or income. Examples of actions which would cause assets or income not to be received are:
  1. Irrevocably waiving pension income;
  2. Waiving an inheritance; or
  3. Not accepting or accessing injury settlements.
  1. Fair Market value means:
  1. If transferred in an arms-length transaction to someone not in a confidential relationship with the individual or anyone acting on the individual's behalf, 75% of estimated fair market value; or
  2. If transferred to someone in a confidential relationship with the individual or anyone acting on the individual's behalf, 100% of estimated fair market value; and
  3. In the case of income, one hundred percent of apparent fair market value.
  1. "Nursing care services" means nursing care provided in a medical institution, a nursing facility, a swing bed, the state hospital, or a home and community based services setting.
  2. "Relative" means child, stepchild, grandchild, parent, stepparent, grandparent, aunt, uncle, niece, nephew, brother, sister, stepbrother, stepsister, half-brother, half-sister, first cousin, or in-law.
  3. "Someone in a confidential relationship" includes an applicant or recipient’s power of attorney, guardian, conservator, legal custodian, caretaker, trustee, attorney, accountant, or agent, and may include a relative or other person with a close and trusted relationship to the individual.

State law prohibits individuals with a confidential relationship from personally benefiting from transactions involving the applicant or recipient’s income or assets. Accordingly, transfers of real or personal property from the applicant or recipient to the person with the confidential relationship must be at 100% of estimated fair market value. Transfers for less than 100% may be subject to the disqualifying transfer provisions.

 

The confidential relationship issue is closely tied to fair market value.  When dealing with personal or real property, the fair market value of the property is an estimate of the property's value.  "True" fair market value is established when such property sells for the highest amount possible.  When selling such property to someone who has a confidential relationship with the seller, the property may not be sold for the highest amount possible, and therefore, the "true" fair market value is not established.  The value of the property, for Medicaid purposes, is still an estimate.  When selling such property to someone who does not have a confidential relationship with the seller, the property is more likely to be sold for the highest amount possible, which will establish "true" fair market value, and which may be more or less than the estimated fair market value.

  1. "Uncompensated value" means the difference between fair market value as of the date of transfer and the value of any consideration received.

When the party that receives the transferred property also assumes any outstanding loan(s) on the property, the amount of the outstanding loan(s) is consideration received.

Example: Mr. Green owns property with an estimated value of $80,000. He has a mortgage for $50,000 on the property. If Mr. Green sells the property for $30,000 and the purchaser assumes the mortgage, Mr. Green is actually receiving $80,000 in compensation, and there is no disqualifying transfer. If the purchaser does not assume the mortgage, the uncompensated value is $50,000 (the difference between $30,000 and the estimated market value of $80,000).

  1. "Home and community based services spouse" has the same meaning as in 05-65-10, Definitions for Spousal Impoverishment.
  2. "Community spouse" has the same meaning as in 05-65-10, Definitions for Spousal Impoverishment.
  3. "Institutionalized spouse" has the same meaning as in 05-65-10, Definitions for Spousal Impoverishment.
  4. The average cost of nursing facility care is:
 
   

Year

Daily Rate

Monthly Rate

2005

144.48

4395

2004

137.59

4185

2003

129.71

3945

2002

127.05

3864

July-Dec 2001

120.08

3652

Jan-June 2001

109.98

3345

2000

104.94

3192

1999

97.68

2971

1998

94.31

2869

1997

89.00

2713

1996

85.00

2562

1995

80.00

2419

1994

74.00

2339