North Dakota Administrative Code › Title 75 - Department of Human Services › Article 75-02 - Economic Assistance › Chapter 75-02-02.1 - Eligibility for Medicaid › Section 75-02-02.1-29 - Forms of asset ownership

Current through Supplement No. 393, July, 2024
1. Ownership
				of real or personal property or liquid assets can take various forms. The first
				basic consideration is the distinction between real and personal property. Real
				property relates to land and those things, such as houses, barns, and office
				buildings, which are more or less permanently attached to it. Personal property
				describes all other things which are subject to individual rights. Personal
				property includes liquid assets, but liquid assets are distinguished from other
				personal property because liquid assets have a market at a price that may not
				ordinarily be negotiated between buyer and seller. Liquid assets include cash,
				accounts, publicly traded stocks, bonds, and other securities, and commodities
				for which there is an established market.
2. Since the various types of property
				ownership may affect the valuation of the applicant's or recipient's assets, it
				is important to carefully record information relating to such property.
a. "Fee" or "fee simple" ownership is a term
				applied to real property in which the "owner" has the sole ownership interest.
				A fee simple interest will, in theory, last as long as the land. Even though
				one owner dies, that owner has the power to sell or to "will" the property. The
				resulting series of owners each has a fee simple. A fee simple ownership
				interest is not changed when the property is mortgaged. The mortgage merely
				secures the owner's promise to repay a debt. If the debt is not paid, the owner
				may be obliged to forfeit the property. Fee simple ownership may be individual
				or may be shared.
b. Shared
				ownership means that the ownership interest in the property is vested in more
				than one person. Shared ownership may be by "joint tenancy" or by "tenancy in
				common". Shared ownership occurs both with real property and with valuable
				personal property, such as accounts, motor vehicles, and mobile homes.
(1) In joint tenancy, each of two or more
				joint tenants has an equal interest in the whole property. On the death of one
				of two joint tenants, the survivor becomes the sole owner. On the death of one
				of three or more joint tenants, the survivors remain joint tenants in the
				entire interest. Any joint tenant, acting independently, may convert the joint
				tenancy to a tenancy in common by selling that person's interest.
(2) In tenancy in common, two or more persons
				have an undivided fractional interest in the whole property. There is no "right
				of survivorship" in a tenancy in common. On the death of one of the tenants in
				a tenancy in common, the surviving tenants gain nothing, and the estate of the
				deceased tenant thereafter owns the deceased tenant's share.
c. Life estates and remainder
				interests.
(1) Real property interests may be
				divided in terms of the time when the owner of the interest is entitled to
				possession of the property. The owner of a life estate, or life tenant, is
				entitled to possession of the real property for a period measured by the
				lifetime of a specific person or persons. A life tenant has the right to use
				the property and is entitled to any rents or profits from the property. A life
				tenant may sell the life estate, but such a sale does not change the identity
				of the person or persons whose lifetimes measure the duration of the life
				estate. A life estate may be referred to as a "life lease".
(2) When a life estate is created, a right to
				possess the property, after the death of the life tenant, must also be created.
				That right is called a "remainder interest", and the owner of that right is
				called a "remainderman". Upon the death of the life tenant, the remainderman
				owns the property. The remainderman is not entitled to possess or use the
				property until the death of the life tenant. The remainderman does have the
				right to sell the remainder interest.
(3) A life estate may be created in which the
				right to possess the property returns, upon the death of the life tenant, to
				the person or entity that created the life estate. The right to have possession
				of property returned after the end of a life estate is properly called a
				"reversion", but is treated as a remainder interest for purposes of
				valuation.