The treatment of various property types as resources is discussed 42 CFR § 416.1200. Other types of property that may be considered an available resource or transfer include:
The equity value of these properties is only excluded if the property:
NOTE: A participant is assumed to have 100% equity value in these types of property unless the participant provides verification to the contrary. The 100% equity value amount is equal to the current market value.
Mineral rights represent ownership interest in natural resources such as coal, oil, natural gas, lead, copper, gravel, stone or other minerals or ores which are normally underground. If the participant owns the land to which the mineral rights pertain, the current market value of the land can be assumed to include the value of the mineral rights.
If the participant does not own the land in which his or her mineral rights pertain, request a current market value estimate of the ownership interest in the mineral rights from the participant. The estimate should be from a knowledgeable source such as, but not limited to:
If an estimate provides a range rather than a single amount, the lower end of the range should be used as the current market value.
Income from mineral rights interests are considered royalties if the payments are:
Use the gross amount of a royalty payment when income taxes or windfall profit taxes are removed to determine the net payment to the participant.
Use the net amount of a royalty payment when a production or severance tax are removed to determine the net payment to the participant.
Timber rights permit one party to cut and remove free standing trees from the property of another party. Some agreements will include the size and species of trees to be cut as well as a description of the land the trees are harvested from.
An easement gives one party the right to use the land of another party for a special purpose.
A leasehold gives one party control over certain property of another party for a specified period. A leasehold does not designate rights of ownership. Rather, it conveys to an individual use and possession of property for a definite term and usually for an agreed rent. See section 1030.010.10 REAL PROPERTY AS AVAILABLE RESOURCE in the December 1973 Eligibility Requirements manual.
EXAMPLE: George owns commercial property with spaces for three businesses in one building. George has leased one of the spaces to Ross for a pet shop for $600 per month. Within the terms stated in the lease, Ross may make improvements to the property, but the final approval on any structural work must come from George because he owns the building.
Leaseholds may also apply to other property. An individual may lease the use of his or her property rights in exchange for royalties on production, profits or other consideration.
EXAMPLE: Demelza’s grandfather, Dwight, passes away and leaves 10,000 acres of land in Colorado to her cousin, Drake. Silver had been found on the property 20 years ago and Dwight severed the mineral rights from the property at that time. When Dwight passed away, the mineral rights were divided amongst Demelza and her cousins. As a result, Demelza inherits a one-fifth share of the total mineral rights of her grandfather’s land. She and her cousins decide to lease the use of their mineral rights to the Denver Silver Company in exchange for production royalties.
Water rights usually confer upon the owner of riverfront or shorefront property the right to access and use the adjacent water.
A “life estate” is when the person only has the right to have possession, use, occupancy, and receive the income from the property during his natural life, and his interest ceases at his death. He cannot sell the property but can sell or mortgage his “life” interest. In some cases, it may be conditional: e.g., for life or until remarriage. Life estates are not counted for any programs applying the OAA, PTD, or AB criteria under 13 CSR 40-2.030(8).
For more information on life estates, refer to 1030.040.00 DISTRIBUTION OF ESTATE OF DECEASED PERSON, 1040.020.25 Transfer To Establish Eligibility, and Appendix A of the December 1973 manual.
When the owner of property gives it to one party in the form of a life estate, and designates a second party to inherit it upon the death of the life estate holder, the second party has a remainder interest in the property.
For more information on remainder interests, refer to 1030.040.00 DISTRIBUTION OF ESTATE OF DECEASED PERSON and 1040.020.30 Determining Fair And Valuable Consideration.