1725.6 Voidable Transfers

Transfers of property by medical assistance recipients subject to the estate recovery provisions can be voided based on State law. The estate recovery unit (ERU) can take legal action against the recipient and have such transfers set aside, thus returning ownership of the property to the individual. This provision is applicable for any transfer made by a Medicaid recipient. Transfers prior to the date of application are also included if the individual transferring property is ultimately approved for prior medical assistance for the date the transfer occurred. Any transfers made prior to the effective date of medical coverage are not voidable but are subject to the provisions of 5720 and subsections.

Recipients subject to voidable transfers. Transfers by the following recipients would be considered under this provision. Persons 55 years of age or older, including those in independent living or long term care arrangements (except for QMB, LMB, or QWD only recipients; and Persons receiving long term institutional or HCBS care. Any partial or total transfer of property may be considered including transfers of exempted property such as a home or a car. Transfers to children, as defined in 1725 , or transfers resulting from the spousal impoverishment provisions of 8144 and 8244 will not be voided. However, transfers between a two spouses other than for spousal impoverishment purposes will be considered. This would include transfer of the home property and later acquired assets which would not fall under the original resource division. Transfers which equal or exceed the following threshold amounts shall be referred to the ERU. These thresholds are to be viewed as a guideline for staff in order to provide latitude to the client to meet ongoing living expenses while helping to prevent a concerted attempt to divest resources in order to deplete the estate. They were also developed to avoid unnecessary administrative burden on staff to investigate and refer all transfers.

Property Limits For real property, the total value of the property transferred must be $5,000 or more. For personal property, the total value of the property transferred must be $500 or more. This would include but is not limited to checking accounts, savings accounts, C.D.s, stocks, bonds, life insurance cash values, and trust funds. Information regarding such transfers is to be referred to the ERU for determination of action. Any resulting penalty period per 5720 shall be applied prior to referring to ERU for a determination. If ERU determines action to void the transfer will not be taken, the transfer penalty remains in place. If action to void will be initiated, any payment denied because of a transfer penalty will be reversed and payment may be authorized. If the transfer is ultimately voided, eligibility shall be reevaluated considering the property. It should be noted that the guidelines in this section do not directly parallel the transfer provisions of 5720 . Transfers of property may be voided even though they would not be penalized under the guidelines of 5720 (e.g., transfers between spouses or transfers by persons in independent living.) In addition, only transfers by persons ultimately considered recipients can be voided whereas transfers of both applicants and recipients can be penalized under the provisions of 5720 .