Valuation of assets

It is not always possible to determine the value of assets with absolute certainty, but it is necessary to determine a value in order to determine eligibility. The valuation must be based on reasonably reliable information. It is the responsibility of the applicant or recipient, or the persons acting on behalf of the applicant or recipient, to furnish reasonably reliable information. Because an applicant or recipient may not be knowledgeable of asset values, and particularly because that person may have a strong interest in the establishment of a particular value, whether or not that value is accurate, some verification of value must be obtained. If a valuation from a source offered by an applicant or recipient is greatly different from generally available or published sources, the applicant or recipient must provide a convincing explanation for the differences particularly if the applicant or recipient may be able to influence the person providing the valuation. If reasonably reliable information concerning the value of assets is not made available, eligibility may not be determined. Useful sources of verification include: 1. With respect to liquid assets: reliable account records. 2. With respect to personal property other than liquid assets: a. Publicly traded stocks, bonds, and securities: stockbrokers. b. Autos, trucks, mobile homes, boats, farm equipment, or any other property listed in published valuation guides accepted in the trade: the valuation guide. c. With respect to harvested grains or produce: grain buyers, grain elevator operators, produce buyers; and, for crops grown on contract: the contract. d. With respect to stock in corporations not publicly traded: appraisers, accountants. e. With respect to other personal property: dealers and buyers of that property. f. With respect to a life insurance policy: the life insurance company. 3. Real property. a. With respect to mineral interests: (1) If determining current value, the best offer received following a good-faith effort to sell the mineral interests. A good-faith effort to sell means offering the mineral interests to at least three companies purchasing mineral rights in the area, or by offering for bids through public advertisement. (2) If determining a past value for mineral rights previously sold or transferred: (a) If producing, the value is an amount equal to any lease income received after the transfer plus three times the annual royalty income based on actual royalty income from the sixty months following the transfer, or if sixty months have not yet passed, based on actual royalty income in the months that have already passed plus an estimate for the remainder of the sixty-month period. (b) If not producing, but the mineral rights are leased, the value is an amount equal to two times the total lease amount; or (c) If not leased, the value is an amount equal to the greater of two times the estimated lease amount or the potential sale value of the mineral rights, as determined by a geologist, mineral broker, or mineral appraiser. (3) In determining current or past value, an applicant, recipient, or the department may provide persuasive evidence establishing a value different from the value established using the process described in this subdivision. b. With respect to agricultural lands: appraisers, real estate agents dealing in the area, loan officers in local agricultural lending institutions, and other persons known to be knowledgeable of land sales in the area in which the lands are located, but not the "true and full" value from tax records. c. With respect to real property other than mineral interests and agricultural lands: market value or "true and full" value from tax records, whichever represents a reasonable approximation of fair market value; real estate agents dealing in the area; and loan officers in local lending institutions. 4. Divided or partial interests. Divided or partial interests include assets held by the applicant or recipients; jointly or in common with persons who are not in the Medicaid unit; assets where the applicant or recipient or other persons within the Medicaid unit own only a partial share of what is usually regarded as the entire asset; and interests where the applicant or recipient owns only a life estate or remainder interest in the asset. a. Liquid assets. The value of a partial or shared interest in a liquid asset is equal to the total value of that asset. b. Personal property other than liquid assets and real property other than life estates and remainder interests. The value of a partial or shared interest is a proportionate share of the total value of the asset equal to the proportionate share of the asset owned by the applicant or recipient. c. Life estates and remainder interests. (1) The life estate and remainder interest tables must be used to determine the value of a life estate or remainder interest. In order to use the table, it is necessary to first know the age of the life tenant or, if there are more than one life tenants, the age of the youngest life tenant; and the fair market value of the property which is subject to the life estate or remainder interest. The value of a life estate is found by selecting the appropriate age in the table and multiplying the corresponding life estate decimal fraction times the fair market value of the property. The value of a remainder interest is found by selecting the appropriate age of the life tenant in the table and multiplying the corresponding remainder interest decimal fraction times the fair market value of the property. Life Estate and Remainder Interest Table Age Life Estate Remainder Interest 0 .97188 .02812 1 .98988 .01012 2 .99017 .00983 3 .99008 .00992 4 .98981 .01019 5 .98938 .01062 6 .98884 .01116 7 .98822 .01178 8 .98748 .01252 9 .98663 .01337 10 .98565 .01435 11 .98453 .01547 12 .98329 .01671 13 .98198 .01802 14 .98066 .01934 15 .97937 .02063 16 .97815 .02185 17 .97700 .02300 18 .97590 .02410 19 .97480 .02520 20 .97365 .02635 21 .97245 .02755 22 .97120 .02880 23 .96986 .03014 24 .96841 .03159 25 .96678 .03322 26 .96495 .03505 27 .96290 .03710 28 .96062 .03938 29 .95813 .04187 30 .95543 .04457 31 .95254 .04746 32 .94942 .05058 33 .94608 .05392 34 .94250 .05750 35 .93868 .06132 36 .93460 .06540 37 .93026 .06974 38 .92567 .07433 39 .92083 .07917 40 .91571 .08429 41 .91030 .08970 42 .90457 .09543 43 .89855 .10145 44 .89221 .10779 45 .88558 .11442 46 .87863 .12137 47 .87137 .12863 48 .86374 .13626 49 .85578 .14422 50 .84743 .15257 51 .83674 .16126 52 .82969 .17031 53 .82028 .17972 54 .81054 .18946 55 .80046 .19954 56 .79006 .20994 57 .77931 .22069 58 .76822 .23178 59 .75675 .24325 60 .74491 .25509 61 .73267 .26733 62 .72002 .27998 63 .70696 .29304 64 .69352 .30648 65 .67970 .32030 66 .66551 .33449 67 .65098 .34902 68 .63610 .36390 69 .62086 .37914 70 .60522 .39478 71 .58914 .41086 72 .57261 .42739 73 .55571 .44429 74 .53862 .46138 75 .52149 .47851 76 .50441 .49559 77 .48742 .51258 78 .47049 .52951 79 .45357 .54643 80 .43659 .56341 81 .41967 .58033 82 .40295 .59705 83 .38642 .61358 84 .36998 .63002 85 .35359 .64641 86 .33764 .66236 87 .32262 .67738 88 .30859 .69141 89 .29526 .70474 90 .28221 .71779 91 .26955 .73045 92 .25771 .74229 93 .24692 .75308 94 .23728 .76272 95 .22887 .77113 96 .22181 .77819 97 .21550 .78450 98 .21000 .79000 99 .20486 .79514 100 .19975 .80025 101 .19532 .80468 102 .19054 .80946 103 .18437 .81563 104 .17856 .82144 105 .16962 .83038 106 .15488 .84512 107 .13409 .86591 108 .10068 .89932 109 .04545 .95455 (2) The life estate and remainder interest tables are based on the anticipated lifetimes of individuals of a given age according to statistical tables of probability. If the life tenant suffers from a condition likely to cause death at an unusually early age, the value of the life estate decreases and the value of the remainder interest increases. An individual who requires long-term care, who suffers from a condition that is anticipated to require long-term care within twelve months, or who has been diagnosed with a disease or condition likely to reduce the individual's life expectancy is presumed to suffer from a condition likely to cause death at an unusually early age, and may not rely upon statistical tables of probability applicable to the general population to establish the value of a life estate or remainder interest. If an individual is presumed to suffer from a condition likely to cause death at an unusually early age, an applicant or recipient whose eligibility depends upon establishing the value of a life estate or remainder interest must provide a reliable medical statement that estimates the remaining duration of life in years. The estimated remaining duration of life may be used, in conjunction with a life expectancy table, to determine the comparable age for application of the life estate and remainder interest table. 5. Contractual rights to receive money payments: a. Except during any disqualifying transfer penalty period as established by subdivision d, the value of contractual rights to receive money payments in which payments are current is an amount equal to the total of all outstanding payments of principal required to be made by the contract unless evidence is furnished that establishes a lower value. b. Except during any disqualifying transfer penalty period as established by subdivision d, the value of contractual rights to receive money payments in which payments are not current is the current fair market value of the property subject to the contract. c. Except during any disqualifying transfer penalty period as established by subdivision d, if upon execution the total of all principal payments required under the terms of the contract is less than the fair market value of the property sold, the difference is a disqualifying transfer governed by section 75-02-02.1-33.1 or 75-02-02.1-33.2, and the value of the contract is determined under subdivision a or b. d. A contractual right to receive money payments that consists of a promissory note, loan, or mortgage is a disqualifying transfer governed by section 75-02-02.1-33.2 of an amount equal to the outstanding balance due as of the date the lender or purchaser, or the lender's or purchaser's spouse, first applies for Medicaid to secure nursing care services, as defined in section 75-02-02.1-33.2, if: (1) Any payment on the contract is due after the end of the contract payee's life expectancy as established in accordance with actuarial publications of the office of the chief actuary of the social security administration; (2) The contract provides for other than equal payments or for any balloon or deferred payment; or (3) The contract provides for any payment otherwise due to be diminished after the contract payee's death. e. The value of a secured contractual right to receive money payments that consists of a promissory note, loan, or mortgage not described in subdivision d shall be determined under subdivision a or b. For an unsecured note, loan, or mortgage, the value is the outstanding payments of principal and overdue interest unless evidence is furnished that establishes a lower value. 6. Contract values. a. The value of a contract under which payments are made to an applicant or a recipient and in which payments are current is equal to the total of all outstanding payments of principal required to be made by the contract, unless evidence is furnished that establishes a lower value. b. The value of a contract under which payments are made to an applicant or a recipient and in which payments are not current is an amount equal to the current fair market value of the property subject to the contract. If the contract is not secured by property, the value of the contract is the total of all outstanding payments of principal and past-due interest required to be made under the contract. c. If the contractual right to receive money payments is not collectible and is not secured, the debt has no collectible value and is not a countable asset. An applicant or recipient can establish that a note has no collectable value if: (1) The debtor is judgement proof which means a money judgement has been secured, an execution has been served upon the debtor which has been returned as wholly unsatisfied, and the debtor's affidavit and claim for exemptions exempt all of the debtor's property or as determined by the department; or (2) The applicant or recipient verifies the debt is uncollectible due to a statute of limitations which may be shown, among other ways, by an attorney's letter identifying the applicable statute and the facts that make the debt uncollectible under that statute of limitations.