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Aged, Blind and Disabled Manual Policy Manual Number: 125.010 Section: Institutional Medicaid Chapter: Transfer of Assets and Penalty Periods

January 5, 2026 Division of TennCare 2

Legal Representative A guardian conservator or one who has the individual’s power of attorney. Effective 10/1/1993 for transfers occurring on or after 8/11/1993, legal representative includes any court or administrative body or any person acting on behalf or at the request or direction of the institutionalized individual or his spouse.

Sole Benefit of a Transfer A transfer of assets for the sole benefit of a spouse, blind or disabled child, or disabled individual is a transfer that is arranged in such a way that no other individual or entity may benefit from the assets transferred at the time of the transfer or at any time in the future. Transfer

Transfer means the sale, exchange, donation or divestiture of a liquid or non-liquid asset including the exchange of an asset for one of less value, e.g., transfer of real property in exchange for a life estate in the property. Uncompensated Value The uncompensated value of an asset is the difference between the individual’s equity in the asset at the time of transfer and the compensation he received in the transaction. Institutionalized Individual An institutionalized individual, for application of transfer of assets policy, includes the institutionalized individual, the institutionalized individual’s spouse, legal representative (including a court or administrative body), or any person acting at the request of or direction of the institutionalized individual or the institutionalized individual’s spouse.

c. Types of Transfers

In addition to giving away or selling property for less than FMV, the actions listed below may be considered uncompensated transfers of assets:

i. Altering or establishing joint accounts in which the individual gives up or limits his rights or access to or interest in the asset; ii. Establishing an irrevocable trust; iii. Purchasing an annuity that does not satisfy the Deficit Reduction Act (DRA) of 2005 requirements or making a change to an annuity that alters the course of payments or the treatment of the income or principal; iv. Waiving entitled income or benefits; v. Waiving or giving up an inheritance; vi. Refusal to take legal action to obtain child support or alimony that is not being paid; or vii. Purchasing an irrevocable burial trust that exceeds the value of merchandise and services.