Probate & Trust Law Section Conference Manual ... - Minnesota CLE

eceived, are not considered to be transfers without adequate
compensation when an applicant or recipient is not competent, or if
competent, does not approve. In these situations the uncompensated value
is considered to be available to the applicant or recipient because the
person who made the transfer must account for and replace any amounts
lost by the applicant or recipient. The individual may require return of the
assets, which may include legal proceedings if necessary. There is no time
limit that applies to these transfers (i.e. the disqualifying transfer look
back date is not applicable).
For example: Ms. Smith has a power of attorney to act on behalf
of her mother who is incompetent. She transfers property owned
by her mother, and valued at $60,000, to herself and her two
siblings. Medicaid will still consider $60,000 as available to Ms.
Smith’s mother as Ms. Smith did not act in the best interest of her
mother. Ms. Smith’s mother has the legal ability to make the funds
available, or to affect the return of the property.
The confidential relationship issue is closely tied to fair market value.
When dealing with personal or real property, the fair market value of the
property is an estimate of the property’s value. “True” fair market value
is established when such property sells for the highest amount possible.
When selling such property to someone who has a confidential
relationship with the seller, the property may not be sold for the highest
amount possible, and therefore, the “true” fair market value is not
established. The value of the property, for Medicaid purposes, is still an
estimate. When selling such property to someone who does not have a
confidential relationship with the seller, the property is more likely to be
sold for the highest amount possible, which will establish “true” fair
market value, and which may be more or less than the estimated fair
market value.
* * * * * * * * * * * * * *
Therefore, you cannot have an attorney-in-fact sign a deed or for any other
gift. If you do, the Medicaid applicant will be disqualified from Medicaid
eligibility permanently, until the assets arefully returned. The Medicaid
applicant will be forever treated as still owning the asset transferred by the
attorney-in-fact.
N. For purposes of determining the period of ineligibility for Medicaid in North
Dakota, the monthly average cost of nursing facility care can be found at North
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