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17.2.6.5 Involuntary Loss of Property The loss of property due to foreclosure or repossession is an allowed divestment and doesn’t result in a penalty period. 17.2.6.6 Intent To Sell for Fair Market Value (FMV) The disposal of an asset by an institutionalized person who can prove they intended to receive FMV, is an allowed divestment and doesn’t result in a penalty period. Example 8 Gary sells a boat and agrees to two payments that total the FMV of the boat. He cashes a check for the first payment, but the second payment is a bad check. Gary shows proof of the bad check and that he has been unable to recover the boat or the second payment. When Gary applies for Medicaid, this is an allowed divestment and doesn’t result in a penalty period. 17.2.6.7 Undue Hardship Request Is Granted Any divestment associated with an undue hardship waiver request that is approved by the IM agency per 22.4 UNDUE HARDSHIP, is an allowed divestment and doesn’t result in a penalty period. 17.2.6.8 Transfer of Homestead Property The transfer of homestead property by an institutionalized person or their spouse for less than FMV is an allowed divestment and doesn’t result in a penalty period when the transfer is to: • The institutionalized person’s spouse. • The institutionalized person’s child if at least one of the following criteria is met: ◦ The child is under the age of 21. ◦ The child is blind or permanently and totally disabled. ◦ The child resided in the institutionalized person's home for at least two years immediately before the institutionalized person either moved to a medical institution or began receiving HCBW services with a nursing-home level-of-care. The child provided care that allowed the institutionalized person to remain residing at home for the entire two years immediately before the person met institutional status (by moving to a medical institution or receiving HCBW services with a nursing-home level-of-care). The child’s provision of care must be verified by a notarized statement from the institutionalized person’s physician or someone else who has personal knowledge of the circumstances. A notarized statement from the child is not sufficient. The homestead transfer does not have to take place after the provision of care in order to be an allowed divestment. • The institutionalized person’s sibling if both of the following criteria are met: ◦ The sibling resided in the institutionalized person's home for at least one year immediately before the institutionalized person either moved to a medical institution or began receiving HCBW services with a nursing-home level-of-care. ◦ The sibling has a verified equity or ownership interest in the home. The equity or ownership interest must be verified by documentation such as a copy of the deed, land contract, or other documentation such as canceled checks or receipts. 17.2.6.9 Transfer of Assets to Spouse or Blind or Disabled Children The transfer of any asset by an institutionalized person or their spouse for less than FMV is an allowed divestment and doesn’t result in a penalty period when the transfer is to: