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Title 8: Medicaid Page 114 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources September 13, 2024 Life Estates or Remainderman Interest Life Estates or Remainderman Interest (Cont.) To determine the value of a life estate or remainder interest, first determine the fair market value of the entire underlying property as if it was not divided into a life estate and remainder interest.

Obtain verification of the fair market value of the underlying property from a disinterested, knowledgeable source, in the same way as for any other undivided property. This could be an appraisal, a real estate fair market analysis, or an offer on the property from a disinterested knowledgeable source.

For real estate, the fair market value of the underlying property is the amount it could be sold for on the open market. A disinterested, knowledgeable source can be a real estate broker, Farmer’s Home Administration, bank, mortgage company, or other lending institution.

For farm land, obtain the average value of an acre of land in the area from the Iowa State University Extension office.

For liquid resources such as a certificate of deposit or bank account, the fair market value is the amount that would be received if the resource were cashed in.

To determine the value of the life estate when the applicant or member is the life estate holder:

1. Determine the fair market value of the entire underlying property (as if it was not divided into a life estate and a remainder interest).

2. Find the line on the life estate column corresponding with the age of the person whose life controls the life estate (the original holder of the life estate) as of the date for which a value is being determined. (If a couple owns the life estate, use the age of the younger spouse.)

3. Multiply the fair market value by the figure in the life estate column.