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17.2.2.1.2 Transfers Prior to the Look Back Period Transfers that occur before the 60-month (five-year) look back period are not subject to divestment rules. This includes the irrevocable assignment of an asset or purchase of an annuity that has not been changed (see 17.2.3 TRANSFERS THAT ARE NOT DIVESTMENT). 17.2.2.1.3 Transfers During the Look Back Period An applicant or member may be ineligible for long-term care services if the applicant or member, their spouse, or anyone acting on their behalf divests the applicant’s or member’s income or assets during the look back period. The period of long-term care ineligibility is based on the value of the divestment. Applicants must report any divestment that occurred during the look back period when they apply. 17.2.2.1.4 Transfers During the Look Back Period That Are Reported Late Divestments that occurred during the look back period and are reported or discovered after eligibility was established must be evaluated. A divestment reported after eligibility was established doesn’t result in an overpayment but may result in a penalty period. See 17.3 PENALTY PERIOD. Example 3 Trisha is 70, institutionalized, and applies for institutional Medicaid. She reports no divestment on her application. Several years later, Trisha reports that she gave her granddaughter $10,000 four years prior to her initial institutional Medicaid application. This divestment happened during her look back period, which is now seven years ago. Because this divestment occurred during the look back period and was required to be reported in her application, the divestment must now be evaluated. 17.2.2.1.5 Transfers Made by the Community Spouse Who Later Applies for Medicaid If a community spouse applies for Long Term Care services, any divestment that occurred during their own look back period must be evaluated. This includes allowed divestments made by the community spouse that were previously evaluated for the institutionalized person. See also 17.3.8 BOTH SPOUSES INSTITUTIONALIZED. Example 4 Brent is an institutionalized person. Eight years after Brent was found eligible for Long Term Care services, Brent’s community spouse, Sven, applied for Long Term Care services. Sven reported a gift of $15,000 to his niece six months before he applied for Long Term Care services. Because this divestment occurred over 60 months (five years) after Brent was found eligible, the divestment was allowed and didn’t impact Brent’s eligibility. See 17.2.6.3 DIVESTMENT BY THE COMMUNITY SPOUSE AFTER FIVE YEARS. This divestment must still be evaluated for Sven’s Long Term Care eligibility because it occurred during Sven’s look back period. 17.2.3 Transfers That Are Not Divestments Once a transfer is determined not to be a divestment, it has no impact on eligibility. 17.2.3.1 Transfers for Fair Market Value A transfer for fair market value (FMV) is not a divestment. See 17.2.4 DETERMINING FAIR MARKET VALUE. This includes: • Receiving equal value in return for an asset. • Converting an asset from one form to another of equal value.