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Aged, Blind and Disabled Manual Policy Manual Number: 110.050 Section: Financial Eligibility Requirements Chapter: ABD Countable and Excluded Resources

September 1, 2026 Division of TennCare 26 cannot sell the property. However, the holder of a life estate can sell his interest in the property, unless restricted by the terms of the contract, and is entitled to any income from the property. The income is deemed available to the holder, regardless of whether she actually receives the income.

Upon the death of the owner of a life estate, full title and ownership usually passes to the individual named in the will or deed as entitled to the property.

Property in which an individual holds a life estate is subject to the same exclusion rules as property the individual owns by title.

2. Life Estate Exceptions

• A life estate will be excluded as the home when the property meets the homestead exemption.

• If the property is used in the passive production of income, the life estate is subject to the Rate of Return test. See Income-Producing. • A life estate will be excluded when ownership is necessary for the production of earned income. See the Business or Self-Employment resource characteristic.

• The terms of the life estate contract prevent the holder from selling his interest in the property.

3. Countable Value

If the life estate is not excluded based on the criteria above, the entire value of the life estate is a countable resource. The life estate value is determined by multiplying the Fair Market Value (FMV) of the property by the percentage listed in the “Life Estate Interest Table” for the age of the individual on whose lifetime the life estate is based.

If more than one person owns the life estate, the value is based on the owner with the longest life expectancy.