5152-4 PERSONAL PROPERTY
5152-4 a CASH ON HAND AND OTHER LIQUID RESOURCES
All cash on hand and other liquid resources (such as stocks and bonds and other items readily convertible to cash) which belong to the dependent child and/or his legal or adoptive parent residing with him and which are not otherwise exempt will be counted against the resource limit. Cash-on-hand or on deposit will be counted against the limit and all other liquid property will be counted against the limit. (See Verification of Resources, section 5150-7.)
The equity value of luxury items, household goods and personal affects not essential to day-to-day life are countable resources. Unless an applicant or recipient states otherwise or there is other clear evidence to the contrary, the caseworker will assume that the client has no luxury items with high enough value to affect eligibility. Luxury items that may count against the resource limit are defined as any household item that has a face value of $1,000 or more and in the prudent judgment of the caseworker is not essential to day-to-day living. These qualifications are best defined by examples:
Entertainment
devices such as stereo sets, personal computers or video games, TVs,
musical instruments, chess sets, home movie or still cameras, model
train layouts, etc. are automatically excluded on the grounds that
entertainment is an essential part of day-to-day life. Most
entertainment items have value consistent with usage and most such
items tend to have fairly high new purchase prices but proportionally
very low resale or equity value.
Items
of personal apparel of unusual value must be considered almost exclusively
by usage and essentialness.
Antique
household furniture that is not stored away may be excluded by assuming
it is performing the daily function of similar non-valuable furniture.
Family silver, samovars, or other rare metal service items are
excluded if they are being used a frequency appropriate to their original
purpose.
Any
set of items that common definition would call a collection
that has a face value of over $1,000
will count as a resource. It is not essential to day-to-day
life and is not primarily used for entertainment. Examples include
collections of guns, stamps, coins, baseball trading cards, matchbook
covers, moustache cups, china plates, Avon bottles, antique toys,
etc.
Religious
articles such as religious jewelry, prompt books or Bibles, crucifixes,
or Russian Orthodox iconographics
are exempt.
New
or antique jewelry over $1,000
face value is exempt only if it is habitually worn-daily or almost
every day.
Decorative objects of art such as paintings, statuary, blankets, masks, carvings, etc. are only exempt if they were made by a person whose relationship to the Family Medicaid client would qualify as a Family Medicaid caretaker relative, or the item(s) has an important cultural significance to a client's clan, village, ethnic, or racial community such that the client is in effect standing as caretaker or agent of the community and is not free to dispose of the item without suffering personal or social consequences for violating established written or unwritten laws or rules.
5152-4 C STOCKS, BONDS, AND SECURITIES
All bonds (United States Government savings bonds or treasury notes, municipal or government bonds, or corporate bonds), all stocks (common or preferred shares of business organizations) and securities which are not otherwise exempt will be counted against the resource limit.
The value will be the current market value less any legal encumbrances. Stocks and certain types of bonds fluctuate in market value daily. In determining the value of such holdings, the caseworker should use the lowest market quotation of the 30-day period preceding the date of the eligibility determination. If a sum is charged to sell a stock, bond, or security, this fee is considered a legal encumbrance. It is subtracted from the gross quotation.
Not all stocks and bonds are automatically salable. The nature of an encumbrance against them may prohibit their sale, in which case they are not available and cannot be counted. Trading in certain stocks and bonds may be suspended for a period of time, or certain stocks in smaller companies may be technically salable but lack any buyers at a fair market value. Availability principles apply.
5152-4 D CASH VALUE OF INSURANCE (COUNTABLE)
Life insurance policies, burial insurance policies, and prepaid burial contracts that are not otherwise exempt will be counted against the resource limit.
The value of such policies is determined by subtracting the total dollar amount of all legal encumbrances against the policy (such as loans made against the policy or policy termination penalties) from the refund dollar value of the policy or contract. Use the value as of the month of the Family Medicaid eligibility determination. The cash surrender value may not be the same amount as the face value of an insurance policy.
If the holders of a joint bank account (checking, savings, or share accounts) are legally married and living together, the balance on the account becomes equally and totally available to each person. This is true regardless of whether the joint account requires any one signature to withdraw (an or account) or both signatures (an and account).
If the
holders of a joint account are legally married but not living together:
An
and account balance will
not be considered an available resource if the absent spouse can't
be located, or can be located but refuses to sign joint withdrawals;
An
or account balance is
considered totally available regardless of the absent spouse's
locatability or intention.
If the
holders of a joint account are not legally married and:
The
other signer on an and
account can't be located, or can be and refuses to sign joint
withdrawals, the balance will be considered an unavailable resource;
The
account is an or account,
the balance will be considered an available Family Medicaid resource
without regard to the location or intent of the other signer,
except in situations listed below and in Section
5156-3.
Bank
accounts on which an applicant has signature authority but that the
applicant does not own, in
whole or in part, are totally unavailable and exempt. Prudent
judgment should be used in determining ownership, considering the
source of the funds, the stated intent of the parties named on the
account, and the actual use, if any, to which the funds have been
put. See Section
5156-3.
When
the caseworker discovers that a recipient has a joint account containing
resources considered available under this section which are sufficient
to place the unit over the Family Medicaid resource limit, the recipient
must be given a written notice allowing 30 days after discovery to
modify the account by removing their name and prove to the agency
they have done so. If he or she complies within the 30 days,
the household remains eligible.
Deposits made into a joint account may also be considered as available income in the month that the deposit is made. See Sections 5160-1 and 5160-2.
5152-4 F PROMISSORY NOTES, LOANS, AND PROPERTY AGREEMENTS
1. Definitions
Promissory note. A promissory note is a written, unconditional agreement where one party agrees to pay a specified sum of money at a specified time to another party. It may be given in return for goods, money loaned, or services rendered.
Loan. A loan is a transaction where one party advances money to, or on behalf of another party, who promises to repay the lender in full, with or without interest. The loan agreement may be written or oral. A written loan agreement is a form of promissory note.
Property agreement. A property agreement is a pledge of a particular property for the payment of a debt within a specified time period. Property agreements on real estate are generally referred to as mortgages, but also may be called land contracts, contracts for deed, escrow contracts, or deeds of trust. Personal property agreements are commonly known as chattel mortgages.
2. Resource value
Generally, promissory notes, loan agreements, and personal and real property agreements can be sold to a third party. If it is saleable, the note, loan, or property agreement is a resource in the amount of the outstanding principal balance, unless evidence is established that it has a lesser fair market value. If the fair market value is less than the outstanding principle balance, the resource value is the fair market value.
If the item is not saleable, it is not a resource. A promissory note, loan, or property agreement may be assumed to be unsalable if there is a legal bar to its sale.
3. Installment payments
Notes and property agreements frequently provide for installment payments to the owner of the note or agreement. If the note or agreement is a resource, that portion of any payment received representing payment on the principal is also a resource, and is not treated as countable income. The portion of any payment representing interest on the principal is unearned income in the month that it is received.
If a note or agreement is not a resource because it is not saleable, the total payment received, whether applied toward principal or interest, is unearned income.
4. Verification
The Medicaid applicant or recipient is responsible for providing proof of the value of any promissory note, loan, and property agreement. If the client contends that the value of the item is less than its outstanding principal balance, evidence of its fair market value may be obtained from knowledgeable sources engaged in the business of making such transactions. Such sources include banks or other financial institutions, private investors, and real estate brokers.
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