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MEDICAL SERVICES POLICY MANUAL, SECTION E

E 513 Determining Value of Ownership Interest

d. Find the line for the life estate holder’s age as of the last birthday. e. Multiply the figure in the life estate column or remainder interest column for that age by the current equity value of the property to determine the life estate or remainder interest value for that individual. f. The individual or person acting on his behalf will be given the opportunity to rebut the determined value. When the individual elects not to rebut, the value determined in item e. will be used. When the individual elects to rebut, proceed to item g. g. To rebut the determined value, the individual or person acting on his behalf must secure an evidentiary statement from a knowledgeable source that the equity value of the interest held in the property is less than the value determined in item e. When the value determined by the knowledgeable source is less than the value determined in item e, the rebuttal value will be used. (Refer to Note 2.) Example: Ten years ago, George and Marie transferred ownership of five acres of land in another state to their three sons and retained a life estate on the property. The Fair Market Value (FMV) of the property is verified at $24,000. There are no liens or encumbrances. George entered a facility last month and has applied for LTC. George is 82 and Marie is 68. Since the transfer did not occur in the look back period, no penalty must be calculated. The property does not meet the requirements of income producing home property to qualify for an exclusion as a resource (Re. MS E-516 #2). The worker must determine the life estate value. $24,000 divided by 2 = $12,000 George'sage is 82. Multiply $12,000 x .40295 (Appendix U) = $4,835.40 Marie's age is 68. Multiply $12,000 X .63610 = $7,633.20 The total life estate value for both Marie and George is $12,468.60.  NOTE 1:Life estate and remainder interests which meet the requirements of income producing non-home property qualify for exclusion as a resource (Re. MS E-516).  NOTE 2:The knowledgeable source statement for rebuttal should be for the market value of the life or remainder interest only, not the market value of the property itself.