432-2 PERSONAL PROPERTY
1. Exclusion Regardless of Value
2. Applying the vehicle exclusion
Property necessary for self-support (Section 432-3A),
Property necessary for an approved plan for achieving self-support (Section 432-3B),
Conditional benefits (Section 433-2).
The vehicle value does not include optional equipment, nor does it include shells or campers that are mounted on the vehicle. Shells and campers are considered separately as personal property.
Caseworkers will determine fair market value and equity value for vehicles in remote areas based on:
The local market conditions and circumstances that exist in the community, including the presence or absence of a significant cash economy. (How much would the vehicle sell for as is, where is? What are other vehicles of its type selling for in the community?);
Accessibility of parts and repair service; and
Information provided by the household.
If the caseworker determines that a countable vehicle is not salable in the community, the vehicle’s resource value is zero.
For countable vehicles, the fair market value and amount owed must be determined.
Find the fair market value of countable vehicles by using the NADA National Automobile Dealers Association Appraisal Guides on the Internet at www.NADAguides.com. (See Administrative Procedures manual section 105-15 for procedures for using the NADA National Automobile Dealers Association website.) The fair market value is the base amount quoted as “Average Trade-in” or “Low Retail”.
The fair market value of a countable vehicle may also be determined using:
Appraisal from a local dealer;
Local newspaper ads, community bulletin boards, or other local advertisements giving the selling price for similar vehicles; or
In remote areas, collateral contacts from a disinterested knowledgeable source such as a bank, village council, store owner, merchant, or dealer.
432-2 B. LIMITED LIFE INSURANCE EXCLUSION
The cash surrender value of all life insurance policies owned by an individual on the life of the same insured person is not a resource to the owner of the policies if the combined face value of the policies does not exceed $1,500.
If the combined face value of all life insurance policies owned by an individual on the life of the same insured person exceeds $1500, the cash surrender value of the policies is a countable resource. (See section 431-2J for related policy on countable life insurance.)
Term insurance with no cash surrender value and burial insurance are not resources and are not taken into account in determining the combined face value of all life insurance policies. Burial insurance is insurance with terms that preclude the use of policy proceeds, including any cash surrender value, for any purpose other than payment of the insured's burial expenses.
A burial space held for the burial of an applicant or recipient and the applicant's or recipient's spouse, or any other member of the applicant's or recipient's immediate family is an excluded resource, regardless of value. The burial space exclusion is allowed in addition to the $1500 burial fund exclusion explained in section 432-2D.
Immediate family members include: parents, including adoptive parents; minor or adult children, including adoptive and step-children; brothers and sisters, including adoptive and step siblings; and spouses of these individuals. Immediate family does not include the members of an ineligible spouse's family unless they meet one of the above definitions.
A burial space is: a burial plot, gravesite, crypt, mausoleum, casket, urn, niche, or other repository customarily and traditionally used for a deceased's bodily remains.
Burial spaces also include necessary and reasonable improvements or additions to the burial spaces, including but not limited to vaults; headstones, markers, or plaques; burial containers such as those used for caskets; and contractual arrangements for the opening and closing of the gravesite.
Some or all of a prepaid burial contract may also qualify for the burial space exclusion if the burial contract is paid up and the funeral provider is obligated to provide the service. A prepaid (or pre-need) burial contract is an agreement where the buyer pays in advance for a burial that the seller agrees to furnish upon the death of the buyer. Any portion of a prepaid burial contract that clearly represents the purchase of a burial space is excludable, regardless of value. Some or all of the remaining value of the contract may be excludable as burial funds.
The funeral provider is not obligated to provide burial services until a burial contract is completely paid for. Therefore, until the contract is paid up, funds paid into the contract do not qualify for the burial space exclusion; they must be treated as burial funds.
432-2 D. FUNDS SET ASIDE FOR BURIAL
The caseworker must explore, as part of the resource determination process, the possibility that the client has set aside funds for his or her own burial or the burial of his or her spouse. The first $1500 of funds set aside for the burial of an eligible individual are excluded as a resource. An additional exclusion of $1500 is applied to funds set aside for the burial of a spouse.
1. Definition of burial funds.
Burial funds include: revocable burial contracts; revocable burial trusts; other revocable burial arrangements (including the value of certain installment sales contracts for burial spaces); cash; financial accounts such as savings or checking accounts; and other financial instruments with a definite cash value such as life insurance, stocks, bonds, certificates of deposit, etc.
Property other than that listed in this definition is not considered burial funds and may not be excluded under the burial funds provision. For example, a car, real property, livestock, etc., may not be set aside as burial funds.
2. Designation of burial funds
The
form(s) in which the resources are held (burial contract, bank account,
etc.); and
The date the individual first considered the funds set aside for the burial of the person specified.
Example:
Jim applies for APA on April 1, 2005. During
the interview, he states that he owns a whole life insurance policy with
a face value of $10,000, and current cash surrender value of $2,000. Jim
provides a signed statement designating the life insurance policy as a
burial fund. Since
the cash surrender value on the date of application is $2,000, $1,500
may be excluded under the burial fund exclusion effective April 1, 2005.
The remaining
$500 counts as a resource.
3. Burial funds must be separate and identifiable
Burial funds must be kept separate from non-burial-related assets to be excluded. Burial funds may, however, be commingled with other burial-related assets. Burial-related assets are burial funds (both excluded and non-excluded) and burial spaces.
Example:
An individual owns a paid-up burial contract worth $4,000. The
entire value of the burial contract is a burial-related asset. $2,000
of the contract clearly represents burial spaces (burial plot, casket,
etc) and is totally excluded. $1,500
of the remaining $2,000 is excluded as a burial fund. The
remaining $500 is counted as a resource.
Once burial funds are separated from non-burial-related assets, the burial
funds exclusion is allowed the month following the month the funds are
separated.
Example:
A bank account containing $3,300, $1,500 of which is designated for burial
and $1,800 of which is other funds available for living expenses, is not allowable and the $1,500 may not be excluded as a burial fund.
If the $1,500 is moved to a separate account and designated as burial funds,
the burial funds exclusion is allowed the month after the funds are separated.
4. Reductions in maximum burial funds exclusion
The $1,500 burial funds exclusion is reduced by the amount of other excluded assets that are available to meet the client's burial expenses. However, excluded assets that represent burial spaces do not reduce the $1,500 burial fund exclusion.
Assets that reduce the burial funds exclusion include:
the face value of any term life insurance on the individual; and
the face value of burial insurance on the individual; and
the value of any portion of an irrevocable burial contract or burial trust that does not clearly represent a burial space, and
the face value of any life insurance policies on the individual which have had their cash value excluded because the face value is less than $1500. (Refer to manual section 432-2B.)
Example:
An applicant has a $1,900 savings account. The
applicant also has a life insurance policy with a face value of $1,000
and a cash value of $750. The
cash value of the insurance policy is excluded as a resource because its
face value does not exceed $1,500. The
$1,500 burial funds exclusion is reduced by $1,000 (the face value of
the policy), to $500.
The applicant may designate the entire $1,900 savings account as funds
set aside for burial, but only $500 of the $1,900 balance in the account
qualifies for the burial funds exclusion; the remaining $1,400 value of
the savings account is a countable resource.
If the applicant or recipient does not designate the entire balance of
the $1,900 as funds set aside for burial, the entire $1,900 is a countable
resource.
5. Increases in value of burial funds
Interest that is left to accumulate and become part of excluded burial funds, or appreciation in the value of prepaid burial arrangements, will be excluded from income and resources. The exclusion of any increase in the value of excluded burial funds may be applied only to increases in value that have accrued since the most recent date that a recipient became eligible for assistance.
The preferred method for keeping track of excluded increases in the value of burial funds is to keep excluded burial funds separate from other non-excluded burial funds. The caseworker may advise the client of this, but may not require it.
Example:
A client designates a $2,000 savings account as having been set aside for
burial since October 1, 1986, and $1,500 of this is excluded as funds
set aside for burial.
The interest that accrues to the excluded portion of the funds from that
date is also excluded as income and resources. The
interest that accrues to the non-excluded portion of the funds in the
account is countable as income in the month of accrual and is a countable
resource thereafter.
6. Burial funds used for another purpose
Example 2:
Funds do
not fall below designated amount
Cheryl originally designates $1,500 for burial. After
several years, interest accumulations increase the excluded amount to
$1,850. During
June, she uses $250 for another purpose. The
remaining amount of $1,600 ($1,500
+ $100 interest) will be excluded as a burial fund for July. Because
the excluded amount has not fallen below $1,500, Cheryl does not have
to re-designate the burial funds.
432-2 E. HOUSEHOLD GOODS AND PERSONAL EFFECTS
Household goods and personal effects are excluded from resources, regardless of their dollar value.
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