An institutionalized household member is a person who is in long-term care or receiving waiver able home or community-based services for a continuous period. A community spouse is the spouse of the institutionalized person.

On application for Long Term Care Medical Assistance Programs, an institutionalized individual's total countable resources must be less than or equal to the state defined resource limit. In order to achieve this, an institutionalized individual may transfer some resources to reduce his/her resources.

Processing will establish which resource transfers are valid and which are invalid. Resources may be transferred manually by a case worker who records Resource Ownership Transfer evidence and retrospective Resource Transfer evidence. However, resource transfers also occur when specific types of evidence are added which are not deemed to be actuarially sound or seem to be benefiting someone other than the institutionalized individual. For example, when an individual creates a trust fund for which they are not the beneficiary or creates an annuity which will pay out for longer than their life expectancy.

When evidence is activated on an integrated Case that includes institutional evidence the system is triggered to evaluate this type of evidence in order to determine if there is an invalid resource transfer, and if so to create an Automatic Resource Transfer record. The system automatically creates an Automatic Resource Transfer record for liquid resource, property, annuity or trust evidence of certain types that is added or updated for the institutionalized household member or their community spouse, if the uncompensated value for the record is calculated to be greater than zero. The uncompensated value is the amount that the individual transferred to another without receiving adequate compensation. The system determines the uncompensated value from rules and calculations according to the specific type of evidence. For example, if someone has a life estate with powers ownership of their property, there will always be an associated uncompensated value which is calculated using the appropriate life estate factor for their age.