431-1 REAL PROPERTY AND PROPERTY RIGHTS

431-1 REAL PROPERTY AND PROPERTY RIGHTS

Note: Real property (including any structures built on the land) owned by Alaskan Native and American Indian is still a countable resource to the Adult Public Assistance program. Please see ADLTC 524-L for more information on Medicaid Exceptions to APA Resource Policy.

431-1 A. NON-HOME REAL PROPERTY

Non-home real property consists of land and buildings or other objects that are attached permanently to the land and that do not meet the definition of a home.

431-1 B. PROPERTY RIGHTS

Even though an individual may not own an item of property, he or she may own certain rights to the property. If the individual can sell these property rights to another party, the property rights are an available resource. Examples of such saleable property rights are listed below:

1. Mineral rights

Mineral rights represent ownership interest in natural resources such as coal, oil, natural gas, and other precious and non-precious metals which normally are extracted from the ground.

2. Timber rights

Timber rights permit one party to cut and remove trees from the property of another party.

3. Easement

An easement gives one party the right to use the land of another party for a particular purpose.

4. Leasehold

A leasehold conveys to one party the use and control of certain property of another party for a specified period.

5. Water rights

Water rights usually confer upon the owner of riverfront or shore front property the right to access and use the adjacent water.

6. Life estate

A life estate conveys to an individual certain property rights for the duration of his or her life, or someone else's life. Most commonly, a life estate conveys a right to use or live on a piece of real property.

The owner of a life estate can sell the life estate but does not have title to the property itself and thus normally cannot sell the property or pass it on as an inheritance. The asset that is potentially countable as a resource is the specific right that is conveyed as a life estate.

Value of a life estate. The value of a life estate is the amount that it would sell for as of the first moment of the month. This value is determined by multiplying the fair market value of the property by a decimal value based on the life estate holder's life expectancy. These life expectancy tables and the applicable decimal multipliers are available on the Internet at the following website: http://policy.ssa.gov/poms.nsf/lnx/0501140120 . If the life estate holder is an SSI applicant or recipient, or someone whose resources are considered available to meet the needs of an SSI applicant or recipient, accept the determination of value made by Social Security.

If an individual wishes to contest the value of a life estate interest determined by a case worker, the individual may obtain an appraisal of the value of a life estate from a knowledgeable source in the area where the property is located. A knowledgeable source is a person or institution that deals in the sale of life estates, such as a financial institution or real estate agent.

7. Remainder interest.

A remainder interest exists if the owner of property conveys it to one party in the form of a life estate, and designates a second party to inherit the property upon the death of the life estate older. The second party has a remainder interest in the property.

Value of a remainder interest. The value of a remainder interest is determined the same way as the value of a life estate, except that the fair market value is multiplied by a different decimal value. These values are available on the Internet at http://policy.ssa.gov/poms.nsf/lnx/0501140120