Assets Which are Excluded for Spousal Impoverishment 510-05-65-25

(Revised 10/01 ML #2716)

 

(N.D.A.C. Section 75-02-02.1-24(4))

 

 

The medically needy exempt and excluded assets are excluded with the following exceptions:

 

  1. Instead of the home, a residence occupied by the community spouse may be excluded. The residence may be owned by either spouse or jointly.

The residence includes all contiguous lands, including mineral interests, upon which it is located. The residence may include a mobile home suitable for use, and being used, as a principle place of residence. The residence remains excluded during temporary absence of the individual from the residence, so long as the individual intends to return. Renting or leasing part of the residence to a third party does not affect this definition. Terms used in this subsection have the following meaning:

  1. "Relative" means a child, stepchild, grandchild, parent, stepparent, grandparent, aunt, uncle, niece, nephew, brother, sister, stepbrother, stepsister, half brother, half sister, first cousin, or in-law.
  2. "Dependency" includes financial, medical, and other forms of dependency. Financial dependency exists with respect to someone whom a taxpayer is able to claim a deduction on a federal income tax return.

  1. The institutionalized or HCBS spouse may choose either the North Dakota Medicaid burial provision or the SSI burial provision. The community spouse is only allowed the SSI burial provision.

The SSI burial provision provides for:

  1. Burial funds of up to one thousand five hundred dollars each, plus earnings on excluded burial funds held for the individual and the individual's spouse are excluded from the date of application. Burial funds may consist of revocable burial contracts; revocable burial trusts; other revocable burial arrangements, including the value of installment sales contracts for burial spaces; cash; financial accounts such as savings or checking accounts; or other financial instruments with a definite cash value, such as stocks, bonds, and certificates of deposit. The fund must be unencumbered and available for conversion to cash on very short notice. The fund may not be commingled with nonburial-related assets and must be identified as a burial fund by title of account or by the applicant or recipient's statement.

The value of any irrevocable burial must be designated toward the burial fund exclusion.

Life or burial insurance excluded under subsection 3a below, (total face value is $1,500 or less), must be considered at face value toward meeting the burial fund exclusion.

Example 1: Mr. Smith has two life insurance policies each having a face value of $500. Because the total combined face value is less than $1500, the life insurance is excluded as an asset, but the $1000 in face value must be applied to the burial exclusion.

Example 2: Mrs. Jones has two life insurance policies each having a face value of $1000. Because the total combined face value is more than $1500, the face value is ignored and the cash surrender value is considered as an asset which may be applied towards either the burial exclusion or the asset limit.

Example 3: Mrs. Smith has two life insurance policies each having a face value of $500. Mrs. Smith also has a $1500 burial fund. Because the total face value of the two policies is less than $1500, the life insurance is excluded as an asset, but the $1000 in face value must be applied to the burial exclusion. Only $500 of the burial fund may be excluded, and the remaining $1000 would be counted towards the asset limit.

Example 4: Mr. Jones has a life insurance policy with a face value of $1000 and an irrevocable burial with a face value of $1000. The face value of the irrevocable burial must be considered toward the $1500 burial provision leaving $500 that could still be excluded for the burial fund. The life insurance passes the $1500 face value test and is excluded as an asset, but since there is still $500 that could be excluded for burial, the life insurance must be applied. No other assets can be excluded towards the burial fund.

  1. A burial space or agreement which represents the purchase of a burial space paid for in full for the individual, the individual's spouse, or any other member of the individual's immediate family is excluded. The burial space exclusion is in addition to the burial fund exclusion. Only one item intended to serve a particular burial purpose, per individual, may be excluded. For purposes of this paragraph:
  1.  "Burial space" means a burial plot, gravesite, crypt, or mausoleum; a casket, urn, niche, or other repository customarily and traditionally used for a deceased's bodily remains; a vault or burial container; a headstone, marker, or plaque; and prepaid arrangements for the opening and closing of the gravesite or for care and maintenance of the gravesite.
  2. "Other member of the individual's immediate family" means the individual's parents, minor or adult children, siblings, and the spouses of those persons, whether the relationship is established by birth, adoption, or marriage, except that a relationship established by marriage ends if the marriage ends.

  1. The following additional assets are excluded:

  1. Life insurance or burial insurance that generates a cash surrender value is excluded if the face value of all such life or burial insurance policies of that person total one thousand five hundred dollars or less. (This exclusion is not allowed for an institutionalized or HCBS spouse who selects the North Dakota Medicaid burial provision.)
  2. Property essential to self-support;
  1. Up to six thousand dollars of the equity value of nonbusiness income producing property which produces annual net income at least equal to six percent of the excluded amount is excluded. Up to six thousand dollars of the combined equity of two or more properties may be excluded, however, each property must produce at least a six percent annual net return to be excluded.

Appendix L illustrates how the $6,000 equity/six percent annual return limits apply. 

  1. Up to six thousand dollars of the equity value of nonbusiness property used to produce goods or services essential to daily activities is excluded. It is used to produce goods or services essential to daily activities, if, for instance, it is used to grow produce or livestock solely for consumption in the community spouse’s household.
  2. To be excluded, property essential to self-support must be in current use, or, if not in current use, the asset must have been in such use and there must be a reasonable expectation that the use will resume:
  1. Within twelve months of the last use; or
  2. If the nonuse is due to the disabling condition of either spouse, within twenty-four months of the last use; or
  3. With respect to property of the type described in (1) above, if the property produces less than a six percent return for reasons beyond the control of the applicant or recipient and there is a reasonable expectation that the property will again produce a six percent return, within twenty-four months of the tax year in which the return dropped below six percent.
  1. Liquid assets are not property essential to self-support.
  1. Lump sum payments of title II or SSI benefits for six consecutive months following the month of receipt.
  2. Payments to certain United States citizens of Japanese ancestry, resident Japanese aliens, and eligible Aleuts made under the Wartime Relocation of Civilians Reparations Act. This asset must be identifiable and not commingled with other assets.