Revision 11-3; Effective September 1, 2011

There is no resource test for the Medicaid Buy-In for Children (MBIC) program. However, the income from income-producing resources is considered. See N-4200, Income.

F-1210 Definition

Revision 09-4; Effective December 1, 2009

Resources are cash, other liquid assets, or any real or personal property or other nonliquid assets that a person, a person’s spouse or parent could convert to cash to be used for his or her support and maintenance. Support and maintenance assistance not counted as income is not considered a resource.

F-1220 Ownership and Accessibility

Revision 09-4; Effective December 1, 2009

A person’s resource is property that:

• is owned, solely or in part, by the person; and
• is accessible to the person.

If the person has the right, authority or power to liquidate the property or his share of it, the property is a resource.

Federal guidelines do not provide any leeway for hardship cases in determining the availability of resources. Unless a court has judged a person to be incompetent and a guardian or other agent is appointed to act for the person, the person has access to resources he owns.

Questions concerning ownership and accessibility may arise with respect to co-owned resources. In certain proceedings, such as divorce, the community property owned by the applicant/recipient and spouse may be divided by the court and ownership awarded to one or the other of the spouses. If the court documents indicate that there is division of marital property, only consider the property awarded to the applicant/recipient as owned and accessible to the applicant/recipient.

When dealing with legal documents, such as deeds, wills or trusts, always consult with the regional attorney to determine the type of asset and therefore the appropriate treatment. See F-1230, Guardians, Fiduciaries and Other Agents.

F-1221 Co-owned Resources

Revision 11-4; Effective December 1, 2011

Treatment of co-owned resources differs depending on the person’s marital status, living arrangement and program requested.

For a person who has an ineligible community spouse and that person is in an institutional setting when determining eligibility for the institutional setting program, do not use the following policy. Instead, use the policy in Chapter J, Spousal Impoverishment.

For determination of Medicare Savings Programs (MSP) eligibility on these spousal institutional setting cases, the following does apply.

For an individual who has a co-owned resource with a sibling, parent, etc., and lives in an institution, the following does apply.

Note: Institutional settings are any Medicaid-certified long-term care facility or any §1915(c) waiver program.

For a person in a noninstitutional setting, co-owned resources may also be counted in certain situations, as follows:

• If a person's co-owned resource is available to him without obtaining the consent of the co-owner, the full value of the resource is counted.
• If a co-owner's consent is required for the resource to be available to the person, and if that co-owner gives the consent, the full value of the available resource is counted.
  • If a co-owner refuses to consent, the resource is neither considered available nor counted.
  • If, however, the co-owner who refuses to consent is an ineligible spouse living with the person, the resource is considered available to the person and is counted against the resource limit.
• If a person has partial ownership in undivided real property, the value of his interest in the property is counted because each co-owner usually has the right to sell his share with or without the co-owner's consent.

Texas law prohibits the sale of the Texas community homestead property without the consent of both spouses. If an ineligible spouse is unwilling to dispose of Texas community homestead property and the person does not live with the ineligible spouse, the Texas community homestead property is not an available resource for the person.

References:

• See F-4000, Liquid and Nonliquid Resources, for treatment of liquid resources including treatment of joint bank accounts.
• See F-5000, Potential Resource Exclusions, for treatment of nonliquid resources.
• See F-4330, Business Property, for treatment of business property.

F-1221.1 Co-owned Resource Examples

Revision 09-4; Effective December 1, 2009

• Co-owned liquid resource
  
  A joint bank account that requires both owners' signatures to withdraw funds is an example of a co-owned resource requiring the consent of the other co-owner before it is available to the person. These accounts are usually established as "Jean Brown and Doris Brown."
• Co-owned undivided real property:
  
  An example of co-owned, undivided real property is land acquired by heirs to an estate.

If a person has a co-owned resource, determine the amount of interest owned, accessibility and the value of the person's interest in the co-owned resource.

Determine accessibility according to whether the co-owner's consent is required for the person to dispose of his interest.

Verify and document ownership and the value of the resource according to the verification and documentation requirements for the type of resource involved.

After contacting a knowledgeable source to determine the equity value of an interest in property, provide the following information:

• Location and a description of the property.
• Percentage of the person's ownership interest in the total resource.
• Amount and a description of any debts, liens (including federal tax liens) or taxes.
• Explanation of factors that may affect the value of an ownership interest, such as need to partition.

Verify and document accessibility from:

• ownership papers or other legal documents; or
• statement from the co-owner, if his/her consent is required, indicating if he/she is planning to make the resource available to the person.

F-1230 Guardians, Fiduciaries and Other Agents

Revision 09-4; Effective December 1, 2009

F-1231 Guardians and Other Agents

Revision 16-3; Effective September 1, 2016

Guardian of the estate. Under Sections 1151.101 and 1151.151, Texas Estates Code, it is the duty of the guardian of the estate to take care of and manage the estate as a prudent individual would manage the individual's own property. The guardian of the estate collects all debts, rentals or claims due to the ward, enforces all obligations in favor of the ward, and brings and defends suits by or against the ward. Only the guardian of the estate can deal with resources.

Guardian of the person. Under Section 1151.051, Texas Estates Code, the guardian of the person has the:

• right to have physical possession of the ward;
• right to establish the ward's legal domicile;
• duty of care, control and protection of the ward;
• duty to provide the ward with clothing, food, medical care and shelter; and
• power to consent to medical, psychiatric and surgical treatment other than the in-patient psychiatric commitment of the ward.

For HHSC purposes, the guardian of the person can sign documents, represent the individual at hearings and deal with small amounts of money. The guardian of the person is like any other responsible party in that the guardian of the person has the authority to protect the interests of the ward.

Under Section 1151.004, Texas Estates Code, a court may appoint the same individual to be both guardian of the estate and guardian of the person. If there are two guardians, one of the estate and one of the person, then the eligibility specialist must examine the court orders establishing the guardianships to decide which is the most appropriate to represent the individual with HHSC.

Note: When a guardianship exists, only that person can act on the individual's behalf to sign applications and review forms.

An individual's resources are available to the individual if they are being managed by a legal guardian, representative payee, power of attorney or fiduciary agent. If, however, a court denies a guardian or agent access to the resources, HHSC does not consider the resources available to the individual.

If individual's guardianship papers do not show that the legal guardian is prohibited access, and if a court has not subsequently ruled a prohibition, the resources are considered available. A guardian's routine need to petition the court for permission to dispose of individual's resources is not a prohibition. When the court rules on a petition to dispose of individual's resources, resources are considered available only to the extent to which the court has made them available for the individual's benefit.

If a legal guardian exists, obtain a copy of the guardianship or power of attorney document.

F-1231.1 Examples of Treatment of Resources

Revision 09-4; Effective December 1, 2009

Situation 1: Louis Bennett has resources valued at $1,300, which are being managed by his son. The son claims that as the power-of-attorney he is the only one who has access to the funds.

Treatment 1: Because a power-of-attorney is given voluntarily, and management of the resources is with the person's consent and for his benefit, Louis Bennett's resources are available to him.

Situation 2: John Morgan's parents used their own funds to purchase a certificate of deposit (CD) for John. The CD was issued as "John Morgan, by Paul and Jean Morgan, Joint Representative Payees."

Treatment 2: The CD is an available resource to John Morgan because the designation indicates that the parents are acting in a fiduciary capacity in controlling funds belonging to John, regardless of the fact that Mr. and Mrs. Morgan paid the purchase price.

Situation 3: Amy Wilson recently left the hospital and entered a long-term care facility. She is in a coma, and there are no known living relatives or friends. After Ms. Wilson had a stroke, her landlady looked through Ms. Wilson's papers and found a $600 term life insurance policy and a checkbook showing a balance of $3,840.65. The bank balance verified by bank statements.

Treatment 3: Although court action to appoint a guardian would be necessary to allow disposal of Ms. Wilson's excess funds, the resources are available to her. Until a court judges Ms. Wilson to be incompetent and unable to handle her affairs, the eligibility specialist cannot assume that the court will prohibit an appointed guardian from disposing of any of the funds in the checking account. Ms. Wilson is ineligible because of excess resources.

F-1232 Fiduciary Agent

Revision 09-4; Effective December 1, 2009

A fiduciary agent is a person or organization acting on behalf of and/or with the authorization of another person. The term applies to anyone who acts in a financial capacity, whether formal or informal, regardless of title, such as representative payee, guardian or conservator. In the case of a trustee, refer to the trust instrument.

An action by a fiduciary agent is the same as an action by the person for whom the fiduciary agent acts.

Assets held by a person in his/her capacity as fiduciary agent for someone else are not countable assets to the person. Assets held by a fiduciary agent for a person are considered as available to the person, unless otherwise excludable.

Identify a fiduciary relationship by the way in which a resource is styled. A bank account established in two names connected by "for" or "by" indicates a fiduciary relationship. Another indication is an account established in two names with the designation of "representative payee" next to one of the names, or an account with the designation "special."

A Medicaid recipient may receive a lump sum payment as the payee for an individual who is not a Medicaid recipient. Consider the Medicaid recipient a fiduciary agent for the individual. Do not consider the individual’s lump sum funds as an available countable asset to the Medicaid recipient when all of the following conditions are met:

• The individual has no bank account.
• The Medicaid recipient is acting as the fiduciary agent.
• Deposits of the lump sum funds are made into the Medicaid recipient’s bank account.

F-1232.1 Medicaid Recipient Responsibilities as Fiduciary Agent

Revision 09-4; Effective December 1, 2009

If the individual’s lump sum funds held in the Medicaid recipient’s bank account are not considered as an available asset to the Medicaid recipient, the Medicaid recipient, as fiduciary agent for the individual, must:

• indicate the current needs of the individual such as food, clothing, housing, medical care and other personal comfort items;
• indicate reasonably foreseeable needs of the individual;
• keep accounting records of how lump sum funds are spent for the individual; and
• establish a separate fiduciary account with the remaining lump sum funds for the individual allowing the person until the next annual redetermination.

Do not use Form H1299, Request for Joint Bank Account Information, when the individual's lump sum funds have been deposited into the Medicaid recipient's account and the Medicaid recipient is allowed time to separate the individual’s funds and deposit them into a separate fiduciary account.

F-1240 Ownership of Unknown Assets

Revision 09-4; Effective December 1, 2009

If a person is unaware that he/she owns an asset, the asset is not counted as a resource for the period during which he/she is unaware of his ownership. For example, he/she may inherit property and not know about the inheritance for some time.

The asset is counted as income in the month that the person discovers his/her ownership.

Begin counting the asset as a resource effective the first of the month after the month of discovery.

F-1250 Patrimonial Assets

Revision 09-4; Effective December 1, 2009

Patrimonial assets are assets irrevocably turned over to a religious order following a vow of poverty. The assets are not countable resources and the transfer of assets penalty does not apply.

F-1260 Conversion of Resources

Revision 09-4; Effective December 1, 2009

If a person converts one type of resource to another, HHSC considers the new resource according to the policy governing that type of resource.

Any cash received from the sale of a resource is considered a resource, not income. This includes proceeds from the sale of a natural resource, such as cutting timber from the person's home property and selling it as firewood. There are two exceptions:

• The owner leases the land or resource rights. The income received from the lease is unearned income.
• The sale of the natural resource is part of the person's trade or business. The income received is self-employment income.

See E-3333, Mineral and Timber Rights.

See F-4000, Liquid and Nonliquid Resources, for nonliquid resources converted to cash.

F-1270 Replacement Value of Excluded Resources

Revision 09-4; Effective December 1, 2009

If an excluded resource is lost, damaged or stolen, the cash, including interest earned on the cash, or the in-kind replacement that the person receives from any source to repair or replace the resource, is excluded. This exclusion applies if the cash and the interest are used to repair or replace the excluded resource within nine months of the date the person received the cash.

Any of the cash or interest that is not used to repair or replace the excluded resource is counted as a resource beginning with the month after the nine-month period expires.

The initial nine-month time period can be extended for a reasonable period up to an additional nine months when the person has good cause for not replacing or repairing the resource. Good cause exists when circumstances beyond the person's control prevent the repair or replacement or the contracting for the repair or replacement of the resource. The nine-month extension can only be granted if the person intends to use the cash or in-kind replacement items to repair or replace the lost, stolen or damaged excluded resource and has good cause for not having done so. If good cause is found, any unused cash and interest are counted as a resource beginning with the month after the good cause extension period expires.

When the president of the United States declares a catastrophe to be a major disaster, the extension period described above can be extended for a reasonable period up to an additional 12 months if:

• the excluded resource is geographically located within the disaster area as defined by the presidential order;
• the person intends to repair or replace the excluded resource; and
• the person demonstrates good cause when he has not been able to repair or replace the excluded resource within the 18-month period.

If an extension of the time period is made for good cause and the person changes his/her intent to repair or replace the excluded resources, funds previously held for replacement or repair are counted as a resource effective with the month that the person reports this change of intent.

Determine the amount of the payment and the date of receipt. Schedule a special review to monitor for replacement or repair within the period allowed.

Sources for verifying the amount of money received are:

• statement from the payment source;
• copy of the person's check; and
• bank deposit slip.

Sources for verifying replacement or repair of the excluded resources are:

• receipt; or
• repair bill.