Resource Definitions

Resource Definitions. A. Resources (General Definition): All assets, including real and personal property which an individual or couple: 1. Owns; 2. Can apply toward basic needs of food, clothing and shelter, either directly or by conversion to cash, (if not already cash); and 3. Are not legally restricted from use for support or maintenance. a) Examples of resources include, but are not limited to: 1) Home, 2) Land, 3) Bank Accounts, 4) Burial Assets, 5) Life Insurance, 6) Automobiles, and 7) Investments. B. Liquid Resources: 1. Cash or items that are readily converted to cash (within 20 workdays). 2. Liquidity or nonliquidity of a resource has no effect on a resource’s countability. 3. Absent evidence to the contrary, assume the following types of resources to be liquid: a) Stocks, bonds and mutual fund shares; b) Checking and savings accounts, time deposits, CDs; c) US Savings Bonds, treasury bills; d) Mortgages and promissory notes; e) This is not an all-inclusive list of liquid resources. C. Non-liquid Resources: 1. Are not cash and are not readily convertible to cash; 2. Liquidity or non-liquidity of a resource has no effect on a resource’s countability; and 3. Absent evidence to the contrary, assume the following resources to be non-liquid: a) Buildings, land and other real property rights, b) Vehicles, c) Farm machinery and livestock, d) Household goods and personal effects, and e) Non-cash business property. f) This is not an all-inclusive list of non-liquid resources. D. Real Property: 1. Land, including buildings or immovable object attached permanently to the land. E. Personal Property: 1. Any property that is not real property. 2. Personal property includes such items as: a) Cash, b) Jewelry, c) Household goods, d) Tools, e) Life insurance policies, and f) Automobiles F. Exclusion: 1. A resource, or part of a resource’s value, that is not considered in the eligibility determination. G. Countable Resources: 1. Resources remaining after all exclusions are applied. 2. The value of a resource is the amount of an individual’s or couple’s equity in it. The current market value and debt on a resource must be verified to determine the equity value. H. Current Market Value (CMV): 1. The amount a resource can reasonably be expected to sell for on the open market in the particular geographical area involved or the sale price, if sold for a higher amount. I. Equity Value: 1. The current market value (CMV) minus any encumbrance (payoff amount), i.e., a piece of property has a CMV of $35,000. The mortgage payoff is $20,000. The equity value is $15,000. J. Encumbrance: 1. An encumbrance is a legally binding debt against a specific property. 2. The debt reduces the value of the encumbered property, but does not prevent the owner from transferring ownership (selling) to a third party. a) However, if the owner does sell it, the creditor will nearly always require payment from the proceeds of a sale. K. Conserved Funds: 1. Funds or property being held for an individual by another person, such as a daughter has $30,000 in a bank in her name but it is verified to be her parent’s money and is used for their needs.