Mississippi Administrative Code
Title 23 - Division of Medicaid
Part 103 - Resources
Chapter 2 - Ownership Interest
Rule 23-103-2.5 - Less Than Fee Simple Ownership
Universal Citation: MS Code of Rules 23-103-2.5
Current through September 24, 2024
A. Equitable Ownership.
1. Exists without legal title to
property;
2. Legal title may belong
to another or to no one;
3.
Examples of equitable ownership include ownership in unprobated estates or
trust property.
a) Unprobated Estate. An
individual may have an equitable ownership in an unprobated estate if he is an
heir or relative of the deceased, receives income from the property or acquires
rights through intestacy laws. Under liberalized policy, estates in process of
probation are excluded. Under SSI resource policy an unprobated estate becomes
a resource the month following the month it meets the definition of
income.
b) Trust Property. A trust
is a right of property, established by a trustor or grantor. A Trustee holds
legal title and manages the property for the benefit of a beneficiary. The
beneficiary does not have legal title, but does have an equitable ownership
interest. Clearance procedures must be followed in determining how the trust
affects eligibility
B. Life Estate Interest.
1. Individual has certain property rights
during his life or someone else's life.
2. May be conditional See instructions below
for handling a conditional life estate.
3. Legal document is required (such as will
or deed).
4. Unless the legal
document restricts rights, the life estate owner has the right to possess, use,
and obtain profits from the property (such as rents).
5. Life estate interest can be
sold.
6. Life estates do not
descend to heirs.
7. Example: Mr.
Heath, now deceased, willed his daughter a life estate in property which he
owned fee simple. The will also designated Mr. Heath's two sons as
remaindermen. The daughter has the right to live on the property until her
death at which time, under the terms of her fathers will, the property will
pass to her brothers as joint tenants.
8. If there are joint owners of a life
estate, the CMV is divided by the number of owners to determine an individual's
share.
9. When one joint owner of
the life estate dies, the surviving owner(s) increases their interest. If a
couple has a life estate and one spouse dies, the remaining spouse is the sole
owner of the life estate. When the remaining spouse dies, the person holding
the remainder interest then has the right to possess and use the
property.
10. It is possible to
have a life estate interest in a structure (house) and not surrounding land.
The CMV of the structure or whatever the tenant has the right to use as
established by the deed or a will would be determined.
11. Under liberalized policy, a life estate
is an excluded resource. The exclusion is not limited to property located in
Mississippi. In addition, if the individual has a life estate interest in more
than one piece of property, all are excluded. However, there are some
exceptions to excluding a life estate:
a) If a
life estate is transferred or sold, eligibility for vendor payment or HCBS
waiver services may be affected. A transfer of a life estate is sanctionable.
1) When the value of a life estate interest
needs to be determined for a potential transfer, follow the procedures below,
using the age of the individual as of their last birthday at the time of the
transfer. Verify the Current Market Value (CMV) of the property. Use the Unisex
Life Estate and Remainder Interest Table for the following steps:
(a) Find the age of life estate owner as of
their last birthday at the time of the transfer.
(b) Locate the factor in the Life Estate
column that corresponds to the age.
(c) Multiply the CMV of the property by the
life estate factor to obtain the value of the life estate. (CMV of the property
X Life Estate Factor = CMV of the life estate).
(i) Example: Jane Ayers took a life estate in
her home in 1988. Now at age 97, she is applying for nursing home care. It is
discovered she transferred her life estate interest to her son two years ago.
Her age as of her last birthday at the time of the transfer was 95 and at that
time the property had a CMV of $250,000. The uncompensated value is determined
as follows:
$250,000 (CMV) x .22887 (Life Estate Factor for Age 95) = $52,217.50 (Uncompensated Value).
12. Conditional Life
Estate.
a) A conditional clause establishes
limitations on the life estate. For example, the grantor may reserve a life
estate for as long as the grantor lives and maintains a home on the
property.
b) For deeds dated on or
after February 8, 2006, consider the entire property transferred if the deed
contains a conditional life estate clause. The transfer date will be the date
of the deed.
c) The life estate can
be corrected if a revised deed is prepared removing the conditional clause with
the grantor reserving a life estate without limitations. However, the transfer
of the remainder interest, if it occurred within the 5-year look back period,
must be considered if the grantor enters long term care. Therefore, removing
the conditional life estate clause may only shorten the transfer
period.
13. Under the
DRA the purchase of a life estate in another individual's home on or after
February 8, 2006, is a transfer of assets unless the purchaser resides in the
home for at least 12 consecutive months after the date of purchase.
a) Do not deduct vacations, overnight visits,
and hospital stays from the one-year period as long as the home continued to be
the individual's legal residence. Count the entire purchase price as an
uncompensated transfer if the purchaser resides in the home for any period less
than one year.
b) Also the DRA
provides that even if the life estate purchaser lives in the home for 12
consecutive months, the purchaser must not pay more than CMV for the life
estate. Any amount paid above CMV is considered a transfer and should be
penalized according to the transfer policy. Verify the purchase price and
calculate the CMV of the life estate. Any amount paid over the CMV of the life
estate is considered a transfer
14. Under strict SSI policy, the value of a
life estate is a countable resource unless an exclusion exists.
a) Verify the Current Market Value (CMV) of
the property.
b) Use the Unisex
Life Estate and Remainder Interest Table for the following steps:
1) Find the age of life estate owner as of
their last birthday.
2) Locate the
factor in the Life Estate column that corresponds to the age.
3) Multiply the CMV of the property by the
life estate factor to obtain the value of the life estate. (CMV of the property
X Life Estate Factor = CMV of the life estate)
c) If there is joint ownership of a life
estate, first determine the CMV of the entire property. Divide the CMV by the
sharer of joint owners to determine the individuals share and then calculate
the individuals life estate value as described above.
1) Example. 75 year-old Harry Thomas has a
life estate in non-homestead property with a current market value of $80,000.
An exclusion for the property cannot be developed. Using the table, his life
estate interest is valued as follows: $80,000 (CMV) x .52149 (factor for age
75) = $41,719.20 (value of the life estate)
2) Example. 75 year-old Max Berry is living
with his daughter due to illness, but states he intends to return home when
health permits. Ten years ago, he transferred his home to his children
retaining a life estate interest. An exclusion can be developed for the home
property since his desire is to be able to return home.
C. Ownership by Will or Descent.
1. An individual may have ownership
interest in an unprobated estate acquired through a will or through the death
of a relative who died intestate (without a will). The heir(s) may be the sole
owner or joint or common owners, etc.
2. Heirs by Will.
a) Have ownership or control of the property
or their joint or common share.
b)
If the will has not been filed with the proper court and has not been probated,
there is question of whether the will is legally binding. Legally, wills are
supposed to be filed for probate; however, there is no time limit.
c) Absent evidence to the contrary, assume
the client owns the property in proportion, whereby he has the right to the
wills directives.
3.
Heirs by Descent.
a) Acquire ownership
interest to property by virtue of the heirs relationship to the deceased.
Intestate property of a deceased person with a spouse and children is shared
equally by the surviving spouse and children. Grandchildren become involved in
ownership interest only when their parent, who was a child of the original
owner, is deceased. The grandchildrens interest is only in the share that their
deceased parent held in interest.
b) Intestate property of an individual with
no spouse or children at the time of death descends equally to his parents and
brothers and sisters. If the deceaseds parents are also deceased, the property
descends to his brothers and sisters. Nieces and nephews become involved only
if their parent who was a brother or sister to the deceased is also deceased.
Their ownership interest is only in the share that their deceased parent held
an interest in.
c) Absent evidence
to the contrary assume an heir inherited property based on their laws of
descent where the property is located.
Social Security Act §1902 (r)(2); 42 CFR §435.601(b) (Rev 1994).
Disclaimer: These regulations may not be the most recent version. Mississippi may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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