Fair Market Price (FMV) is an estimate of the prevailing price if sold on the free market.
2. Fair and important consideration may be identified by computing the FMV of real residential or commercial property as determined by the Assessor in the county in which the residential or commercial property lies, divided by the suitable percentage; for (residential - 19%, agricultural - 12%, or business - 32%) - compared to the money or note got at the time of the transfer.

If present FMV of residential or commercial property can not be obtained and/or agreed upon utilizing this approach, make a determination based on all available realities the candidate or recipient can furnish, together with all info the FSD staff can get. Take into account the purchase rate and year of purchase, devaluation and state of repair, insurance assessment, appraisals produced the purpose of acquiring loans or mortgages, and recognized sales prices of similar residential or commercial property in the community.

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

NOTE: This consists of the worth of a life estate kept by the applicant/participant if real possessions are transferred. Refer to 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 documentation of the expenditure and disposition of funds received from the transfer to validate it is not a readily available resource to the applicant/participant.

1. Compare the 2 amounts to identify whether a reasonable quantity was gotten by the individual. 'Reasonable amount' does not mean the amount got must equate to the appraised worth. If in question, personnel needs to seek advice from a supervisor to determine what is affordable. If the quantity is roughly the exact same, it is determined reasonable worth was received.

Bona Fide Loans

If the individual mentions the transfer of money or securities was payment of a loan, evidence must be obtained with regard to the presence of an authentic loan agreement. The burden of evidence of the authentic nature of the loan is with the individual.

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

If the documentation verifies the individual is/was paying back a bona fide loan, it does not impact eligibility on the factor of incorrect transfer of properties. If the paperwork does not suggest the loan was authentic, it will be considered an improper transfer of possessions 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) changed Section 1917( c)( 1) of the Social Security Act 42 USC § 1396p( c)( 1 )( i) reliable February 8, 2006, including extra guidelines connected to the purchase of promissory notes, loans, or mortgages for people getting MO HealthNet supplier 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 applies to transfers that occurred prior to February 8, 2006.

Steps to think about:

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

It is an incorrect transfer if an institutionalised individual creates a promissory note prior to February 8, 2006, that has at least one of 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 produced

Any funds (money) used to buy a promissory note, loan or mortgage on/or after February 8, 2006, shall lead to a transfer of properties charge unless all of the following criteria are met:

- The payment term duration should be actuarially sound
- Payments should be made in equivalent quantities throughout the regard to the loan and with no deferment of payments, early benefit, or balloon payments; and
- Promissory notes, loans, or mortgages must restrict the cancellation of the balance upon death of the loan provider

If the note does not meet the "safe harbor" (3 requirements) noted above, consider the quantity transferred at the time the arrangement was developed.

- If the note is unassignable (non-negotiable) it has no market value, and the transfer penalty is calculated based upon the amount of cash offered on the date the note was created minus payments got as of the date of the application.
- If the note is assignable (negotiable), or does not mention assignability/transferability, it can be offered however might 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 charge for the amount of the balance owed unless the note is assignable and proof is provided the market worth is enough to prevent a penalty.

If personnel is unable to figure out eligibility utilizing the actions provided; personnel might send out agreements for an Ask for Interpretation of Policy through the proper 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 earnings, a resource, and/or if a transfer of residential or commercial property has taken place without getting fair and important factor to consider.

Personal Care Contracts

If the applicant/participant states the transfer of real estate, individual residential or commercial property, cash or securities made after August 28, 2007, was for individual care, the list below conditions need to be met:

- There is a written agreement between the specific or people providing services and the private receiving care that specifies 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 replicate those which another party is being paid to offer;
- The individual getting the services has actually a recorded need for the individual care services offered;
- The services are necessary to avoid institutionalization of the private receiving benefit of the services;
- Compensation for the services shall be made at the time services are performed or within 2 months of the arrangement of the services; and
- The fair market price of the services supplied prior to the month of institutionalization amounts to the fair market price of the possessions exchanged for the services.

NOTE: The reasonable market worth for services provided will be based on the current rate paid to companies of such services in the county of residence.

A Personal Care Contract is to render services to assist keep people from becoming institutionalized. When thinking about whether fair and important factor to consider was received, personnel should figure out the value of the services provided prior to the date the individual got in the nursing center, which they amount to the fair market price of the properties exchanged for the services.

A personal care agreement not meeting the conditions specified above is thought about to be a transfer of possessions without receiving reasonable and important factor to consider and goes through a penalty.

If there is any concern of whether or not fair and important factor to consider for the properties was received in exchange for the individual care contract, a Request for Interpretation of Policy and a summary of the situation must be sent out to State Office Program and Policy Unit through the correct supervisory channels for Income Maintenance programs. Provide specific case information along with a copy of paperwork of the possession transfer and personal care contract.

EXAMPLE 1: Ellen Red goes into a nursing center on July 25, 2007. On September 01, 2007, Mrs. Red's daughter, Sara, enters into a Personal Care Contract with Mrs. Red. The contract states that Sara will prepare healthy meals, clean Mrs. Red's house and do her laundry; assist with grooming, bathing, dressing and individual shopping. Sara will also schedule social outings for Mrs. Red and visit her weekly. Duties likewise consist of monitoring Mrs. Red's physical and mental condition and performing the guidelines and instructions of her attending physicians. Sara has the obligation of interacting with any health care provider, long-lasting care facility administrator, social services, insurer and government employees in order to secure Mrs. Red's rights, benefits and possessions.

On December 6, 2007, Sara, the Care Provider, filed the contract along with a petition for costs with Probate Court. The exact same day the court granted a payment of $12,000.00 to Sara as the conservator under the contract. Sara pertained to the regional Family Support Office and applied for Medical Assistance Vendor Benefits for Mrs. Red on December 16, 2007. An application was submitted together with a copy of the look 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 valuable consideration. Services rendered should be important to avoid institutionalization of the specific receiving benefit of the services. Sara's services started September 01, 2007; this wants Mrs. Red's admission date of July 25, 2007. In addition, settlement for services need to be made at the time services are carried out or within 2 months of the provision of services. Sara did not petition the court up 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 2 months following. Therefore, the whole $12,000.00 is thought about a transfer of possessions without getting reasonable and important factor to consider.

EXAMPLE 2: Mr. Archie and his child, Millie, sign a Personal Care Contract on September 1, 2007, and $20,000.00 is moved to Millie on November 1, 2007, for services rendered to Mr. Archie beginning September 1, 2007. In the composed arrangement Millie's duties and kind of services are listed together with the frequency and period of those services. There is a declaration supplied from Mr. Archie's physician validating his need for the services. Mr. Archie went into a nursing facility on October 14, 2007, and used for Medical Assistance Vendor Benefits on November 2, 2007.

A Personal Care Contract is to render services to help keep people from becoming institutionalized. When thinking about whether fair and valuable factor to consider was received in exchange for the possessions transferred the eligibility expert need to look at the value of the services supplied to Mr. Archie prior to the date he got in the nursing care center to determine just how much of the $20,000.00 will be considered reasonable and important factor to consider and how much will be thought about a transfer of properties. The eligibility expert must determine if the services supplied to Mr. Archie prior to going into the nursing center amount to the fair market value of the possessions exchanged for the services. In Mr. Archie's county, the existing rate paid to suppliers for such care is $75.00 each day. Millie took care of Mr. Archie from September 1st through October 13, 2007, which is 43 days. 43 days of care x $75.00 (current rate paid to companies of such services in Mr. Archie's county of home) = $3225.00 reasonable and valuable factor to consider to Millie. The overall value of the possessions moved 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 reside on the residential or commercial property and receive the income from it. The brand-new owner of the residential or commercial property is described as the rest individual. The purchase of a life estate results in a transfer of asset charge 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 exceeds the reasonable market price the difference between the quantity paid and the reasonable market price is dealt with as a transfer of possessions.

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

- The specific buying a life estate in another people' home lives there for a period of a minimum of one year following the date of purchase.

If the person does not reside there for a minimum of one year following the date of purchase the entire amount utilized to purchase the life estate is treated as a transfer of possessions.

EXAMPLE: Mr. Webster is 72 and resides in his child's home. Mr. Webster purchases a life estate in his child's home for $39,000.00 on December 17, 2006. The worth 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 bought at or near reasonable market worth. Mr. Webster enters 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 a minimum of one year following the purchase of the life estate. Therefore, the whole purchase quantity is thought about a transfer of assets without fair and important factor to consider.