Real Property Life Estate Promissory Note Examples Example

Real Property Life Estate & Promissory Note Examples

Example One Transfer & Life Estate • February 2012, Otis Owner, age 72, transferred his home to Nellie Niece, retaining life estate. • FMV at time of transfer = $160, 000 • Mortgage = $20, 000 • Countable resources: $7, 750 • No burial fund • Determine the Uncompensated Value for the transfer of the home

Example One con’t Transfer & Life Estate, cont’d • Nellie Niece sells the home January 2013. Otis Owner (now age 73) agrees to give up his right to life estate. • FMV now $165, 000 • Now has $13, 400 countable resources • Has an irrevocable burial trust which includes $1500 of non burial space items • Determine the Uncompensated Value for early termination of the life estate

Example Three Promissory Note Example • 75 year old male applicant, Steuben County, transferred $100, 000 cash to his son 1 month prior to applying for NH MA • Also $100, 000 was used to purchase a promissory note on the same day • Payments of $10, 000/m for 10 months began immediately § Payments are actuarially sound, and contract states that if the father passes away, payments will continue to the estate

Example Three Promissory Note Example (cont’d) • • Private rate at NH $11, 000 Other countable Income: $1, 750/m Countable resources at application: $13, 000 Client has an Irrevocable Burial Fund containing over $1500 in non-burial space items • Determine if client is “otherwise eligible” and length of penalty period