Medicaid Policy
Medicaid Policy
No Previous Policy (371-5 was renumbered to 575-5 as of November 1, 2017)
For a transfer to be for the sole benefit of a spouse, disabled or blind child, or disabled person there must be a legal document completed at the time of the transfer that defines the use of the assets so that only the spouse, disabled or blind child, or disabled person can benefit.
If there are any provisions that allow another person to benefit from the transfer, now or in the future, the transfer is not for the sole benefit of a spouse, disabled or blind child, or disabled person.
The transfer must be actuarially sound, in other words, the beneficiary must expect to receive all of the assets over the course of his or her expected life span. (See life expectancy table, Table XII) If the transfer document, or trust document, does not specify the payment amounts and schedule, it is not actuarially sound.
Special Needs trusts and Pooled trusts do not have to meet the actuarially sound test, nor do they have to specify how much will be paid to or for the benefit of the beneficiary. Such trusts must meet the criteria in 512-2.3.
Subsequent transfers a spouse makes for less than fair market value will result in a penalty period for the individual (575-1).