16 Del. Admin. Code § 20000-20320
Real property is land, including houses or immovable objects attached permanently to the land. The terms real estate, realty, and real property are used synonymously with one another and designate real property in which an individual has ownership rights and interests. When an applicant/recipient of Medicaid institutional services is the owner of real property, the following procedure and eligibility rules apply.
12 DE Reg. 1324 (04/01/09)
In fee simple ownership, the owner is completely free of conditions imposed by others.
In tenancy in common ownership, each owner has a part interest in the property and each portion can be sold separately.
Tenancy by the entirety only applies to married couples. If a husband and wife are sole owners of a property and the deed does not specify type of ownership, there is a precedent in Delaware law that allows the presumption that ownership is "tenancy by the entirety". These terms refer to property owned by a husband and wife where each member has ownership interest in the whole property which is indivisible. Ownership by the entirety can only be dissolved by death or divorce.
In the case of joint tenancy each owner has an equal interest in the whole property and each equal part can be sold with the agreement of the co-owners.
In the case of lifetime rights the individual may live in or use the property during their lifetime, but has no ownership rights. The individual merely has the right to live in the property.
10 DE Reg. 1596 (04/01/07)
12 DE Reg. 1324 (04/01/09)
12 DE Reg. 1324 (04/01/09)
If ownership is a tenancy by the entirety and both spouses are still living the property will not be considered a resource. If the ownership is in fee simple or tenancy by the entirety with one spouse deceased, the entire equity value of the property is considered a resource according to sections 20320.3, 20320.4, and 20320.5.
In the case of joint tenancy where the co-owners do not agree to sell, the property will not be considered a resource. A statement from the co-owner(s) indicating refusal to sell must be placed in the case record. The refusal to sell creates a legal bar so the property is excluded as a resource. DSS/Medicaid does not require the individual to sue the co-owner to accomplish sale or access.
If ownership is joint tenancy (where the co-owners agree to sell) or tenancy in common, the applicant/recipient's share in the equity must be treated as a resource according to sections 20320.3, 20320.4, and 20320.5.
If the property is the principal place of residence for the joint owner(s) and it would cause undue hardship (loss of housing) to sell the jointly owned property it can be disregarded.
Life Estate is an ownership interest in real property. The right of ownership exists for the lifetime of an individual(s). Upon the death of the individual(s) the ownership passes to the "remainderman." A life estate may be sold or otherwise transferred. As per the Deficit Reduction Act of 2005 (DRA), effective 4/1/06, a life estate in a home property may be an excluded resource provided the purchaser resides in the home for a period of at least 1 year after the date of purchase and continues to live in the property.
10 DE Reg. 1596 (04/01/07)
A life estate in nonhome property must be counted as a resource. See section 20320.3 - Principal Place of Residence Section.
10 DE Reg. 1596 (04/01/07)
In a life estate transaction, a transfer of assets is involved when the applicant or spouse, as owner of the property, transfers ownership of that property to another individual while retaining lifetime rights. This transfer is for less than fair market value whenever the value of the transferred asset (i.e. ownership of the property) is greater than the value of the life estate. See Section 20350 - Transfer of Assets to determine whether a penalty is assessed because of a life estate transaction. In addition, effective 4/1/06, a transfer of assets has occurred when an individual purchases a life estate in another individual's home when the purchaser has not lived there for at least 1 year.
10 DE Reg. 1596 (04/01/07)
To calculate the value of the life estate, use the life estate table. Determine the value of the life estate by multiplying the current market value of the property by the life estate decimal that corresponds to the life estate owner's age.
See Life Estate and Remainder Interest Table 20350
10 DE Reg. 1596 (04/01/07)
Under a life estate with powers, the owner of the property creates a life estate for himself or herself, retaining the power to sell the property, with a remainder interest to someone else such as a child. Since the life estate holder retains the power to sell the property, its value as a resource is the property's full equity value (unless it is an otherwise excludable resource).
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. Determine the value of a remainder interest by multiplying the current market value of the property by the remainder interest decimal that corresponds to the individual's age.
See Life Estate and Remainder Interest Table 20350
10 DE Reg. 1596 (04/01/07)
The applicant may be given an opportunity to rebut the value placed on the life estate. The rebuttal must include an estimate from a disinterested, knowledgeable source (such as a broker or appraiser) showing that the value is less than our determination or that the property has no marketable value.
An individual's home is property in which he or she has an ownership interest and that serves as his or her principal place of residence. An individual's principal place of residence is the dwelling the individual considers his or her established or principal home and to which, if absent, he or she intends to return. A dwelling cannot be considered as an individual's principal place of residence until the individual has actually lived in it and used it as such. The principal place of residence includes the plot of land on which the home is located and any land that adjoins it. The land adjoins the home if it is not completely separated by land in which the individual has no ownership interest. Easements and public rights of way (utility lines, roads, etc.) do not separate the other land from the home. The home includes all related buildings on the adjoining land.
The applicant must be able to express the desire to return to their principal place of residence located in Delaware. The record must include a written statement of intent to return to the home. The case record must indicate if the applicant gives intent verbally to DMMA social worker.
If someone other than applicant writes the statement, there must be an indication that this is in fact the intent of the applicant (i.e. signature or mark of applicant). If an institutionalized applicant/recipient is mentally capable of indicating that he intends to return to his principal place of residence in Delaware (even if medical evidence indicates that he will never recover sufficiently to return home), then the home may be excluded as a resource. In no case can the family declare this intent for the applicant/recipient.
15 DE Reg. 362 (09/01/11)
Statements of intent to remain valid until the home is sold. If the home is sold, the proceeds then become a countable resource. If the applicant becomes incompetent after a valid statement of intent is signed, it does not invalidate the statement. The home remains excluded as long as the applicant owns it regardless of changes in mental conditions.
For an individual with no spouse or other dependents, the value of a home purchased after admission to a medical institution cannot be excluded with an intent to return home statement. This is because the individual has not actually lived in the home.
The applicant/recipient's home is used by a spouse and/or dependent relative during the absence. Relatives are: child, stepchild, grandchild, parent, stepparent, grandparent, aunt, uncle, niece, nephew, brother, sister, stepbrother, stepsister, half brother, half sister, cousin or an in-law of any of these.
The record must show contact with the spouse or dependent relative indicating that she/he continues to reside in the house, the relationships between the individuals, and the basis of dependency (financial, medical, etc.). In addition, the applicant/recipient's statement of what he considers his principal place of residence to be should be obtained and placed in the case record.
The Social Security Act provides for the exclusion from resources property that is essential to an individual's means of self-support. Property excluded under this provision generally falls into 3 categories.
The following conditions need to be met to exclude the essential to self-support property regardless of value of rate or return.
Property can be excluded up to $6,000 equity regardless of rate of return if it is a nonbusiness property used to produce goods or services essential to daily activities. For example, land used to produce vegetables or livestock solely for consumption by the individual's household.
The property essential to self-support may be excluded up to $6,000 if it produces a 6% rate of return and meets the following two conditions.
Equity is the current market value less legal debts such as mortgages, liens, etc. Document the file with a copy of the appraisal of the fair market value. Determine rate of return based on income and value figures shown on the individual's Schedule E of Form 1040 for the prior year. If no tax return is available, obtain other appropriate evidence, for example a copy of the lease agreement. In addition obtain the estimated net and gross income from the property for the current tax year.
The property excluded under the above categories (20320.5.1, 20320.5.2, 20320.5.3) must be in current use in the type of activity described. If not in current use, there must be a reasonable expectation that the required use will resume within 12 months of last use. The 12-month period can be extended for an additional 12 months if nonuse is due to a disabling condition.
Non-home real property consists of land and buildings or immovable objects that are attached permanently to the land and that do not meet the definition of home or principal place of residence.
Obtain the current market value (CMV) of the real property. The (CMV) may be determined by an estimate of the property's CMV from a knowledgeable source. The estimate must show:
Knowledgeable sources include but are not limited to real estate brokers, mortgage companies, banks, savings and loan associations, or similar lending institutions, or an official of the local property tax jurisdiction.
The value of the property as a resource is its CMV minus the outstanding principal balance on any loan or mortgage unless there is a legal bar to the sale of the property. (See Section 20300.3 Resource Ownership )
The policy in this section applies to nursing facility and HCBS recipients who are receiving Long-Term Care (LTC) Medicaid on or after January 1, 2006. It does not apply to recipients who were receiving LTC Medicaid prior to January 1, 2006, and who maintain continuous Medicaid eligibility as per the Deficit Reduction Act section 6014.
10 DE Reg. 1700 (05/01/07)
If a Medicaid recipient started receiving LTC Medicaid before January 1, 2006, do not evaluate home equity at the next redetermination. As long as he remains continuously eligible for Medicaid, do not evaluate home equity. If the recipient is found ineligible for Medicaid, and he subsequently re-applies for LTC Medicaid, home equity must be evaluated when he reapplies.
10 DE Reg. 1700 (05/01/07)
If a Medicaid recipient started receiving LTC Medicaid on or after January 1, 2006, evaluate home equity at the next redetermination.
Verification of the equity value of the home is required. Equity value is determined by using the current market value of the home minus any encumbrance (e.g. mortgage; loan; lien on the home.
Individuals with equity value in home property that exceeds the home equity cap as set by federal regulations are NOT eligible for Medicaid payment of long-term care services unless the home is lawfully occupied by:
| . | a spouse, |
| . | a dependent child under age 21 years, or |
| . | a blind or disabled child of any age. |
*Note: This is not a change in the general rule that excludes a home of any value for purposes of determining eligibility for Medicaid. It applies only to medical assistance payment for nursing facility services, or other long-term care services referred to in 1917(c)(i)(C)(i).
Individuals with substantial home equity may be eligible for Medicaid payment of other covered services if they meet all the other Medicaid eligibility requirements.
See DSSM 20320.7.E for current home equity cap.
10 DE Reg. 1700 (05/01/07)
16 DE Reg. 639 (12/01/12)
Reverse mortgages do not reduce equity value until payments are being received from the reverse mortgage.
10 DE Reg. 1700 (05/01/07)
A home equity line of credit or home equity loan does not reduce the equity value until credit line or loan has been used or payments from the credit line or loan have been received. DMMA shall verify that the home equity credit line or loan was not transferred for less than Fair Market Value.
10 DE Reg. 1700 (05/01/07)
When there are co owners to the property, divide the total equity interest by the number of shared owners proportional to their interest in the property. Husband and wife are considered as one owner.
10 DE Reg. 1700 (05/01/07)
The home is defined as any residential property in which the applicant and/or spouse possess an ownership interest that also serves as the principal place of residence of the applicant and /or, spouse, or dependent child. An applicant and spouse may have an ownership interest in several residential properties, but only one shall be considered a home for the purposes of this section. See DSSM 20320.3.
10 DE Reg. 1700 (05/01/07)
Beginning in the year 2011, the limit on the substantial home equity will be increased yearly based on the Consumer Price Index (CPI).
| Effective Date | Home Equity Cap |
| January 1, 2006 | $ 500,000 |
| January 1, 2011 | $ 506,000 |
| January 1, 2012 | $ 525,000 |
10 DE Reg. 1700 (05/01/07)
16 DE Reg. 639 (12/01/12)
Applicants/recipients may request a hardship waiver. See DSSM 20400.12.1 for definition of hardship.
10 DE Reg. 1700 (05/01/07)
16 Del. Admin. Code § 20000-20320