An official State of Texas website.
Revision 18-1; Effective March 1, 2018
Transfer of assets policy applies when assets are transferred by a person who resides in an institutional setting (for example, a Medicaid certified long-term care facility) or is receiving home and community-based waiver services through a Home and Community-Based Services waiver, or by the person’s spouse or someone else acting on the person’s behalf.
Transfer of assets policy does not apply to the mandatory groups of MEPD programs such as Pickle. See Section A-1000, General Information, and Section A-2000, Mandatory Coverage Groups, for information. Transfer of assets policy also does not apply to the Medicare Savings programs such as QMB, SLMB, etc.
There is a "look-back" period to find transfers of assets prior to the date the person is institutionalized or, if later, the date the person applies for Medicaid.
If a transfer of assets for less than fair market value is found, Medicaid must withhold payment for nursing facility care (and certain other long-term care services) for a period of time referred to as the penalty period.
The length of the penalty period is determined by dividing the value of the transferred asset by the average private-pay rate for nursing facility care in Texas. There is no limit to the length of the penalty period.
For certain types of transfers, no penalty is applied. The principal exceptions to the transfer of asset penalty are transfers:
- to a spouse or to a third party for the sole benefit of the spouse;
- by a spouse to a third party for the sole benefit of the spouse;
- to certain disabled individuals or to trusts established for those individuals;
- for a purpose other than to qualify for Medicaid; and
- for which imposing a penalty would cause undue hardship.
Example: Assets transferred to an Achieving a Better Life Experience (ABLE) account for the benefit of a disabled child are not subject to a penalty period. (See Section I-3300 “For the Sole Benefit” Requirements.)
I-1210 Transfer of Assets Terms
Revision 09-4; Effective December 1, 2009
The term assets, with respect to person, includes all income and resources of the person and of the person's spouse, including any income or resources that the person or such person's spouse is entitled to but does not receive because of action by:
- the person or such individual's spouse;
- a person, including a court or administrative body, with legal authority to act in place of or on behalf of the person or such individual's spouse; or
- any person, including any court or administrative body, acting at the direction or upon the request of the person or such individual's spouse.
Examples of actions that would cause income or resources not to be received are:
- irrevocably waiving pension income;
- waiving the right to receive an inheritance;
- not accepting or accessing injury settlements; and
- tort settlements that are diverted by the defendant into a trust or similar device to be held for the benefit of the plaintiff.