The purchase of a life estate in another person’s home is a transfer of assets for less than fair market value unless the purchaser resides in the home for 12 consecutive months after the date of the purchase.
NOTE The one year residency requirement does not replace other policy on how life estates are treated. The amount used to purchase the life estate will still need to be evaluated to determine if compensation is received for the purchase of the life estate.
For example, if the customer uses $100,000 to purchase a life estate in another customer’s home that provides the person with a life estate value of $60,000, there is an uncompensated value of $40,000.
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Term |
Definition |
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Life Estate |
A life estate is ownership by a right to the use of the property without title to the property (see MA705T). |
When a life estate has been purchased in another person’s home, documents need to be provided to prove:
The date of the purchase;
The amount paid to purchase the life estate; and
The equity value of the other person’s home.
Proof may include, but is not limited to, the following:
Deeds;
Wills; and
Other legal documents.
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Program |
Legal Authorities |
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ALTCS |
42 USC 1396p(c)(1)(J) AAC R9-28-401 and 409 |