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Note This policy does not apply to individuals who have been continuously enrolled in LTC Medicaid for every month since January 1, 2009. 16.8.1.5 Sale of Home Property Money from the sale of real property is an asset. When the property that is sold is a homestead, disregard the proceeds if they are placed in an escrow account and used to purchase another home within three months. 16.8.1.6 Life Estate A life estate allows an individual to gift a home or other possession but retain certain property rights for his or her lifetime. Generally a life estate provides an individual the right to possess and use a gifted property, and to make money from it. The person does not have the title to or the right to sell the property. He or she usually may not pass it on to his or her heirs as an inheritance. He or she also has the right to sell his or her interest in it. He or she is liable for all costs of the property such as taxes and repairs, unless the will (or deed) states otherwise. When property is conveyed to one person for life (life estate holder) and to another person (the remainder man), both a life estate interest and remainder interest are created. When the life estate holder dies, the remainder man holds full and unconditional title to the property and can dispose of it as he or she wishes (fee simple). Life estate values need to be determined for divestment calculation. Example 3: Sidney gifted away his $100,000.00 home to his nephew Frank, but retained a $30,000.00 life estate, the divested amount is $70,000.00. The life estate interest is an unavailable asset when determining Medicaid asset eligibility for Sidney. However, the remainder interest is an available non-exempt asset for Frank, the remainder person, for Medicaid eligibility determinations. Determine the value of the remainder interest for the date you are determining Medicaid eligibility. To do this, use the age of the life estate holder on the date that you are determining eligibility for the remainder person. Also use the property's FMV as of that same date. Then select the remainder multiplier (the one that corresponds to the age of the life estate holder) from the life estate table and multiply the FMV by that number. The result should be the value of the property's remainder interest for the remainder person as of the date that eligibility for Medicaid is being determined for that person. To determine the value of a life estate or remainder interest: 1. In the Life Estate and Remainder Interest Table (see SECTION 39.1 LIFE ESTATE AND REMAINDER INTEREST), find the line for the person's age as of the transaction date. 2. Multiply the figure on that line in the Life Estate or Remainder column times the fair market value to determine the value of the life estate or remainder interest. When a life estate holder moves off the property and the property is rented, follow the instructions in SECTION 15.5.3 RENTAL INCOME for counting the rental income. If a remainder person sells the property for which a life estate is retained, the life estate holder is not entitled to any of the payments. However, if the life estate holder gives up his or her life estate to secure the sale of the property, then the life estate holder would be entitled to some portion of the proceeds from the sale of the property. Treat money received as a result of property settlement as an asset (see SECTION 16.7.10 PROPERTY SETTLEMENT).