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14 TITLE 16 HEALTH AND SAFETY DELAWARE ADMINISTRATIVE CODE In the case of joint tenancy where the co-owners do not agree to sell, the property will not be considered a resource. A statement from the co-owner(s) indicating refusal to sell must be placed in the case record. The refusal to sell creates a legal bar so the property is excluded as a resource. DSS/Medicaid does not require the individual to sue the co-owner to accomplish sale or access. If ownership is joint tenancy (where the co-owners agree to sell) or tenancy in common, the applicant/recipient’s share in the equity must be treated as a resource according to sections 20320.3, 20320.4, and 20320.5. 20320.2.1.3 Principal Place of Residence If the property is the principal place of residence for the joint owner(s) and it would cause undue hardship (loss of housing) to sell the jointly owned property it can be disregarded. 20320.2.2 Life Estates Life Estate is an ownership interest in real property. The right of ownership exists for the lifetime of an individual(s). Upon the death of the individual(s) the ownership passes to the "remainderman." A life estate may be sold or otherwise transferred. As per the Deficit Reduction Act of 2005 (DRA), effective 4/1/06, a life estate in a home property may be an excluded resource provided the purchaser resides in the home for a period of at least 1 year after the date of purchase and continues to live in the property. 10 DE Reg. 1596 (04/01/07) 20320.2.2.1 Non-Home Property A life estate in nonhome property must be counted as a resource. See section 20320.3 - Principal Place of Residence Section. 10 DE Reg. 1596 (04/01/07) 20320.2.2.2 Transfer of Assets In a life estate transaction, a transfer of assets is involved when the applicant or spouse, as owner of the property, transfers ownership of that property to another individual while retaining lifetime rights. This transfer is for less than fair market value whenever the value of the transferred asset (i.e. ownership of the property) is greater than the value of the life estate. See Section 20350 - Transfer of Assets to determine whether a penalty is assessed because of a life estate transaction. In addition, effective 4/1/06, a transfer of assets has occurred when an individual purchases a life estate in another individual’s home when the purchaser has not lived there for at least 1 year. 10 DE Reg. 1596 (04/01/07) 20320.2.2.3 Calculations of Life Estate Value To calculate the value of the life estate, use the life estate table. Determine the value of the life estate by multiplying the current market value of the property by the life estate decimal that corresponds to the life estate owner's age. See Life Estate and Remainder Interest Table 20350 10 DE Reg. 1596 (04/01/07) 20320.2.2.4 Life Estate with Powers Under a life estate with powers, the owner of the property creates a life estate for himself or herself, retaining the power to sell the property, with a remainder interest to someone else such as a child. Since the life estate holder retains the power to sell the property, its value as a resource is the property's full equity value (unless it is an otherwise excludable resource). 20320.2.2.5 Remainder Interest When the owner of property gives it to one party in the form of a life estate, and designates a second party to inherit it upon the death of the life estate holder, the second party has a remainder interest in the property. Determine the value of a remainder interest by multiplying the current market value of the property by the remainder interest decimal that corresponds to the individual's age. See Life Estate and Remainder Interest Table 20350 10 DE Reg. 1596 (04/01/07) 20320.2.2.6 Rebuttal The applicant may be given an opportunity to rebut the value placed on the life estate. The rebuttal must include an estimate from a disinterested, knowledgeable source (such as a broker or appraiser) showing that the value is less than our determination or that the property has no marketable value.