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Chapter: 1600 Assets Program: MSSI, SFP 52

estate/remainder interest table (Appendix A-17) using the individual’s age at the time of the transfer. The result is the amount of the transfer.

If an individual retains life estate using a lady bird deed or life estate with powers, no transfer has occurred. The individual retains full ownership powers in the property and it is only upon their death that the property transfers ownership to the remainderman. 1640.0613.02 Purchase of Life Estate (MSSI) If an individual purchases regular life estate in property they have not resided in for at least a year prior to nursing home admission, a transfer has occurred equal to the full amount paid for the life estate.

If an individual purchases regular life estate and lives in the property for at least a year prior to entering a nursing home, a transfer has occurred, but the transfer amount is reduced by the value of the life estate interest. Determine the value of the life estate by multiplying the fair market value of the property as the date of the purchase by the life estate factor (based on the age of the individual as of the date of purchase) from the life estate/remainder interest table in Appendix A- 17. Deduct the value of the life estate from the amount the individual paid for it. The remainder is the amount of the transfer.

If an individual purchases a lady bird life estate or life estate with powers, this gives them full rights to the property, including the right to sell. The compensation received is equal to the fair market value of the property less any indebtedness or restrictions that may reduce the actual value. 1640.0614.01 Value of Compensation Received (MSSI) A determination of the value of compensation received must be made based on the agreement and expectation of the parties at the time of transfer or sale, if earlier. The value of compensation is the gross amount paid or agreed to be paid by the purchaser. Expenses attributed to the sale do not reduce the value. Compensation may be received in one or more forms as described in passages 1640.0614.02-1640.0614.04. 1640.0614.02 Compensation in Cash (MSSI) Compensation in the form of cash is the total amount paid or agreed to be paid, if greater, in exchange for the asset. The eligibility specialist must obtain documentary evidence when available (for example, bill of sale, contract, receipts, and the like) or statements from the eligible individual and the person(s) to whom the property was transferred to establish the amount of cash compensation received. 1640.0614.04 Compensation in Support or Services (MSSI) Compensation in the form of support and/or maintenance or services is based on:

1. the FMV, 2. the support or services at the time of asset transfer, and 3. the frequency/duration of the support or service.

In order for compensation to be considered, a statement and any related documentation must be obtained from the person(s) to whom the property was transferred to establish the FMV of the support and/or maintenance provided if:

1. the intent is for a specified period, the actual length of time the support or service is provided is used; 2. services are to be performed on an "as needed" basis, or for an interim period, the statement must include the individual's expectation as to the frequency of the services and the basis for that expectation; and