Transfer of Property

The transfer of personal property with a net market value of more than $300 or of an interest in real property, without adequate consideration within two years prior to the date of application may render the applicant/recipient ineligible for a period of time. If the transfer was for the purpose of qualifying for aid, it will render the applicant ineligible unless the property or the interest therein is reconveyed to the recipient or is made subject to a lien held by the County. Refer to Transfer of Real Property - GA Policy [172] and Transfer of Personal Property - GA Policy [182].

The calculation of the period of ineligibility is discussed in “Period of Ineligibility.” Refer to Period of Ineligibility.

Definitions

Transfer

A transfer is defined as a change in ownership whereby a person no longer holds title to, or beneficial interest in property, including life estate.

Adequate Consideration

Adequate consideration is defined as the receipt of cash or property which is fair and reasonable under the circumstances considering the net market value of property that is sold, converted or transferred.

Intent of Transfer

The intent of the applicant in transferring property is to be considered in determining the effect of the transfer on eligibility. A transfer of property is, in itself, disqualifying only when the reason for making the transfer was to qualify for aid, for a greater amount of aid, or to avoid the 6% net yearly income computation.

To determine the “intent” of transfer, the EW must evaluate the applicant's stated reason for the transfer and the consistency of such statements with the known facts.

Documentation of expenditures or transfers of property is not required unless the applicant was, when excess property was determined or transfer occurred, applying for or in receipt of aid and/or informed of a requirement to document expenditures or transfers. Documentation is required if the client disagrees with a decision of ineligibility due to property transfer.

Transfers Not Resulting in Ineligibility

The following are examples of transfers not resulting in a period of ineligibility:

The property was exempt.
The Net Market Value of personal property transferred was $300 or less.
Adequate consideration was received. This includes:
- Satisfying a legal debt, such as court ordered child support.
- Reimbursing someone (other than a spouse) for care or benefits provided when there was an agreement or understanding that reimbursement would be made.
At the time of transfer, foreclosure or repossession of property was imminent.
The client did NOT receive adequate consideration, but provided evidence that shows without a doubt that it was not done in order to become eligible.
The property was transferred more than 2 years prior to application.

Transfers Resulting in Ineligibility

Ineligibility results from a transfer without adequate consideration (use current market value as a base) if transfer was:

Within two years of application, AND
Utilization of property was possible only by sale, AND
The value of current property, when added to the market value of the transferred property, would have exceeded maximum property limits.

The following transfers usually result in ineligibility:

Transfer for the purpose of reducing property value to below the maximum property limits.
Transfer of real property not used as a home for the purpose of avoiding the required 6% net income calculation.
Transfer of income-producing personal property (value over $300).
Transfer in return for life care.
Adequate consideration was NOT received for nonexempt property transferred, such as cash, mortgages, life estates, or deeds of trust.

Note: Presumption is made that transfer was made in order to establish eligibility. The client can refute this presumption. The client must show that adequate resources were available for support and medical care.

ExampleExample

Mr. Clarke applied for GA on October 15, 2011. In December 2010, he transferred a deed-of-trust valued at $30,000 to his daughter as a Christmas gift. Since the property that was transferred was not exempt and adequate consideration was not received, a determination must be made as to whether this was a transfer to establish eligibility, and, if so, a period of ineligibility must be determined.