The is issue is whether real estate purchased by a parent in the name of their ineligible-minor child is a countable resource to determine the eligibility of an SSI eligible child in the household.

Usually a person purchasing property in the name of another are assumed to be doing so to have beneficial interest in the property and not to give ownership interest to the person whose name is on the deed. Ohio law allows a parent to make a gift of real estate to their minor child and retain no ownership interest in the property. If the parent had another reason to put the property in the child's name or if the parent "asserts ownership by for example, managing the property, collecting rents, and paying taxed and insurance is evidence rebutting the inference that the (parent) intended to make a gift" the property is not a gift and the parents retain ownership of the property.

In this case the parents titled real estate in the name of an ineligible minor child. This action was not needed at the time of purchase to make the SSI eligible child meet the entitlement factors because they used the house as their residence. The family stopped residing on the property two years later. The parents then rented the house and used the proceeds for the financial benefit of the entire household. The parents clearly asserted their ownership of the property and showed that the real estate was not a gift to the ineligible minor child. The property is a countable resource for the SSI eligible child effective when the family no longer used the property as their residence.

This is with reference to your inquiry as to whether Elsie Y~, the mother of SSI recipient David Y~ II, is the owner of property located at 7545 Depot Road, R~, Ohio. Elsie signed a contract to purchase the property in the name of her twelve year old daughter, Amanda Y~, and you have inquired whether the contract is valid under state law. We conclude that the contract is valid under Ohio law, but that Elsie is the beneficial owner of the property and it is therefore a resource for purposes of determining David II's eligibility for SSI.

The relevant facts are as follows. Henry and Loretta N~ executed a deed to Amanda Y~ by Elsie Y~ for the R~, Ohio property in September 1992. The purchase price was $4,000, to be paid in monthly installments of $81.11. The family, including David II, resided on the property until August 1994, when they moved to Wellsville, Ohio. They purchased the Wellsville property upon which they now reside in the name of David II. After the family moved to Wellsville, SSA suspended David II's SSI because of excess resources. Elsie Y~ has appealed the suspension, asserting that she is not the owner of the R~, Ohio property, and that it belongs to her daughter, Amanda. The R~ property is valued at $26,190. The monthly installments on the R~ property are being made by Elsie, either because Amanda has no income, or, according to Elsie's December 1994 letter to the agency, because Amanda receives only $69 per month in child's insurance benefits; according to Elsie, Amanda's and David II's father David is disabled./

Since the Y~ moved to Wellsville, the R~ property has been rented for $600 per month. The rental income is received by David (father) and Elsie Y~. You informed this office that the $600 monthly rent is used for general family expenses; it has not been set aside in an account in Amanda's name or otherwise held separately from the rest of the family's resources.

According to SSI - Property of Minors, OGC V (P~) to G~, Acting ARC-POS, SSA V (6/22/94), it is a general principle of common law that a minor is capable of acquiring or taking title to real estate. This principle has been followed in Ohio in Kenwood Savings and Loan Ass'n v. Williams, 220 N.E.2d 582 (Ohio Ct. C.P. 1966). Ohio has also recognized that contracts entered into by minors are voidable and not void, and that they may be disaffirmed after the minor reaches the age of majority. See Kenwood, 220 N.E.2d at 583-84. In addition, the Ohio Transfers to Minors Act (OTMA) provides that a minor may be the recipient of a gift of real estate. See Ohio Rev. Code Ann. § 1339.31-39. The OTMA imposes specific requirements on the form of the transfer, and in particular requires that a custodian be named in the transfer instrument. The OTMA further provides, however, that it is not the exclusive method for making gifts or transfers to minors. Ohio Code Ann. § 1339.39./

The Second Restatement of Trusts provides that generally, where property is purchased in the name of an individual other than the person paying the purchase price of the property, a resulting trust is presumed to arise in favor of the payor of the purchase money./ Restatement (Second) of Trusts § 440 (1959) (hereinafter, Restatement). The inference is that the purchaser intends to have the beneficial interest in the property for himself, and not for the transferee; the transferee, therefore, holds the property in trust for the individual who furnished the purchase money. Id. at Ch. 12 Topic 4 Intro. Note. Resulting trusts are created by operation of law, and are based on the doctrine that valuable consideration and not legal title determines the equitable title or interest. 89 C.J.S. Trusts § 98 (1955); 76 Am. Jur. Trusts § 179 (1992). Resulting trusts arise by implication of law from the parties' acts and conduct, and are not dependent on the existence of a contract or agreement between the parties. 89 C.J.S. Trusts § 102(c) (1955).

The Restatement further provides, however, that where an individual purchases property in the name of a relative, such as where a parent purchases property in the name of her child "or other natural object of bounty ... a resulting trust does not arise unless the [payor] manifests an intention that the transferee should not have the beneficial interest in the property." Restatement § 442. In these circumstances, the inference is that the payor intends to make a gift to the transferee by virtue of the payor's and transferee's relationship. Id. at § 442 cmt. a. This inference applies where, as here, the payor of the purchase price is the parent of the transferee. Id Where such a relationship raises the inference that a gift is intended, the burden is on the payor seeking to enforce a resulting trust to prove that he did not intend to make a gift to the transferee. Id. at § 442 cmt. b.

Whether or not a resulting trust arises depends on the intention of the parties at the time of the transfer. Restatement § 443 cmt. a. The intention of the payor not to make a gift to the transferee may be shown by oral declarations of intention as well as by the circumstances under which the transfer is made. Id. Section 442 provides, in part:

Thus, the fact that it would be improvident of the payor to make a gift to the transferee is an indication that he did not intend to make a gift. So also, the fact that the circumstances are such that the payor would have a reason for taking title in the name of another other than an intention to give him the beneficial interest is an indication that he did not intend to make a gift.

Id. While it is the intention of the payor at the time of the transfer which determines whether a resulting trust arises, the conduct of the payor and of the transferee subsequent to the transfer may show that at the time of the transfer, the payor did not intend to make a gift to the transferee. Id. The fact that the payor asserts ownership by, for example, managing the property, collecting rents, and paying taxes and insurance is evidence rebutting the inference that the payor intended to make a gift. Id.

Ohio case law is generally in accord with the principles set out in the Restatement concerning whether a transfer is a gift or gives rise to a resulting trust. In In re Clemens, 472 F.2d 939 (6th Cir. 1972), Mrs. C~' son had cosigned a note and mortgage for the purchase of property, but the property was purchased with money Mrs. C~ had saved over fifteen years, she had no other income aside from Social Security benefits and the income she received from the property, and she paid all the bills and taxes for the property. Mrs. C~' limited resources were one of the factors the Sixth Circuit cited in support of its finding that Mrs. C~ had not intended to make a gift to her son of any part of the property purchased.

Ohio has also considered the effect of a transfer by a parent to a child in accordance with general principles governing the creation of a valid gift. In Streeper v. Myers, 7 N.E.2d 554, 556 (Ohio 1937), the court stated that the requisites of a valid inter vivos gift/ are an intent on the part of the donor to make an immediate gift of property and a delivery thereof to the donee with relinquishment of control over the property by the donor. The recording of title to land in the name of the donee raises a rebuttable presumption of delivery./ 38 C.J.S. Gifts § 65(d) (1943).

Another Ohio court considered whether a valid gift had been made in a recent case in which the mother had purported to make a gift of money by opening a bank account in her daughter's name. State v. Keith, 610 N.E.2d 1017 (Ohio App. 1991). In Keith, the defendant opened an account in her daughter's name in accordance with some of the requirements of the OTMA, and named herself as custodian of the account. At issue was whether the account was the defendant's property, and therefore forfeited in a RICO action against her. Keith's daughter, through her father, argued that the money in the account was a gift to her from her mother, the defendant. The trial court had rejected the daughter's claim because Keith had not complied with the OTMA and because Keith lacked sufficient donative intent to make an unconditional gift of the money in the account to her daughter. The appeals court noted that absent donative intent, no valid gift can be made. The court acknowledged that the opening of the account pursuant to the OTMA was prima facie evidence of donative intent, but stated that extrinsic evidence could be introduced to demonstrate contrary intent. The court considered that Keith had withdrawn $20,000 from the account to purchase commercial property, though she claimed that the money was merely a loan she had made by herself as custodian of the account to herself as an individual. Rejecting Keith's argument, the court determined that Keith's actions with respect to the account did not demonstrate an intention to make an irrevocable gift to her daughter. The court concluded: "By treating the money as her own, Keith's claim of a gift to Kim was drawn into serious doubt." 610 N.E.2d at 1019.

Here, Elsie Y~ purchased the R~ property in Amanda's name, but the monthly installments are being paid by Elsie (or, according to the copy of the cancelled check submitted, from both parents' joint account). Since Amanda is Elsie's child, there is a presumption that Elsie intended the purchase of the R~ property in Amanda's name as a gift. If that presumption is rebutted by clear and convincing evidence, the inference of a resulting trust again becomes effective. See Eckenroth v. Stone, 158 N.E.2d 382, 385 (Ohio App. 1959); Clemens, 472 F.2d at 943. We conclude that the facts and circumstances surrounding the purchase of the R~ property in Amanda's name show that no gift was intended and that a resulting trust arose in Elsie's favor by implication of law. While the only direct evidence of the Y~' intention at the time of the transfer would likely be Elsie's claim that she intended a gift to Amanda, the circumstances here should suffice to rebut that claim.

Since the Y~ moved to Wellsville and began renting the R~ property, the $600 monthly rent has been received by Amanda's parents, David and Elsie Y~. We were informed that the $600 monthly rent collected from the property is used for general family expenses, and has not been set aside in an account in Amanda's name or otherwise held separately from the rest of the family's resources. In order to show that a valid gift of the property was intended, the Y~ would likely have to demonstrate that the rental income from "Amanda's" property was being conserved or invested in her name or in some fashion that clearly demonstrated that her parents were managing the income for her benefit and as custodians or guardians only. Here, the Y~' treatment of the income from the property purchased in Amanda's name as their own for general family expenditures undermines their contention that the purchase was intended as a gift. See Keith, 610 N.E.2d 1017./

The Restatement provides that another consideration in determining whether a transfer is a gift or creates a resulting trust is whether the payor of the purchase money would have any reason for purchasing the property in the name of the transferee other than to make a gift. Restatement § 443 cmt. a. Here, it appears likely that the property was placed in Amanda's name to prevent its counting as a resource in order to maintain David II's SSI eligibility./

Another factor supporting the existence of a resulting trust in Elsie's favor is that, excluding the value of the R~ property, the Y~' resources fall below the eligibility limit for SSI. In Clemens, 472 F.2d 939, Mrs. C~' limited resources supported the Sixth Circuit's finding that Mrs. C~ had not intended to make a gift to her son of any part of the property purchased. Similarly, the circumstances here undermine Elsie's assertion that the R~ property was intended as an outright gift to twelve-year-old Amanda because the property is valued at more than $26,000 and the family, presumably, has less than $3,000 in non-excludable resources. See Restatement § 443 cmt. a.

Based on the facts you have provided and on the applicable law, we conclude that the presumption that the R~ property was a gift to Amanda is rebutted, and that Elsie is the owner of the R~ property because a resulting trust arose in Elsie's favor when she purchased the property in Amanda's name. Amanda holds only bare legal title to the property. See76 Am. Jur. 2d Trusts § 179 (1992); Clemens, 472 F.2d at 942. Since Elsie Y~ is the beneficial owner of the R~ property, she could sue to enforce the resulting trust. Elsie, therefore, has the right to liquidate the property for cash. 20 C.F.R. § 416.1201(a), (a)(1) (1994). Under the regulations, the property is therefore a resource belonging to Elsie, and David's termination from SSI due to excess resources was proper.

Sincerely,

Thomas W. C~

Chief Counsel, Region V

By:

Mary T~

Assistant Regional Counsel

A conservatorship or blocked account is presumed to be available to the beneficiary for support and maintenance absent a legal restriction on the guardian's use of or access to the funds.

This is with reference to your August 3, 1993 inquiry concerning whether funds held in a guardianship account on behalf of a minor SSI beneficiary, Erik R~, would constitute countable resources for SSI purposes. We conclude that these funds were available for Erik's support and maintenance, and were therefore resources of the beneficiary for SSI purposes.

Erik R~ had claims for personal injuries sustained as a result of an automobile accident. In June 1988, he received a partial settlement of his claims in the amount of $6,303,/ of which his attorney took $2,101 in fees. The court ordered that Erik's funds be deposited at a certain bank in a restricted account that precluded withdrawal of the funds, absent a court order, until Erik attained the age majority./ In September 1988, Erik's parents requested and were granted permission from the court to withdraw $15.00 per week for school expenses, $85.00 per year for uniforms, and $65.00 per year for "special class costs," such as costs for gym, swimming, and field trips.

In March 1989, the court appointed Erik's mother as the guardian of his person and estate, and directed that no funds held in Erik's name could be released to her without a court order. In June 1989 a final settlement was reached with regard to Erik's claims for personal injuries, and a total of $20,088.02 was deposited on Erik's behalf in a guardianship account at Bank One./ The court ordered that no funds be released from the account absent a court order until Erik attained the age of majority. In February 1990, Erik's mother requested, and the court granted, permission to withdraw $663.50 for school expenses, $1240.00 for hearing aids, and $191.00 for clothing and shoes. In January 1991, Erik's mother requested and was granted permission from the court to withdraw $500.00 for schooling and $430.00 for supplies and uniforms. In August 1991, Erik's mother requested and the court granted permission to withdraw $56.13 for bifocal glasses, $120.00 for hearing aid insurance, $222.00 for school fees and lunches, and $309.00 for clothing, shoes, and supplies. More recently, Erik's mother was given permission to spend $5,100 of the funds in the account to Ohio State Waterproofing, as the mold in the basement was causing asthmatic and allergic problems for Erik.

A resource, for SSI purposes, includes assets that the individual owns and could convert to cash to be used for his or her support and maintenance, i.e. for food, clothing, and shelter. 20 C.F.R. § 416.1201(a) (1993); cf. 20 C.F.R. §§ 416.1123(h), 416.1130(b) (defining in-kind support and maintenance). When a fiduciary (such as a guardian) manages and controls funds owned by an SSI beneficiary, those funds are considered to be available to the beneficiary for the beneficiary's support and maintenance, absent a legal restriction on the use of or access to the funds. See POMS SI 01120.010.C (Feb. 1992); POMS SI 01120.110.C (Mar. 1988). The funds in this case are held in a "blocked" account, in that Erik's guardian (his mother) may access funds held on his behalf only with the court's permission. We previously advised that funds in a blocked account are presumed accessible by petition and should be considered resources if state law requires the ward's funds to be used for his support and maintenance. See Blocked Accounts as SSI Resources—ACTION, OGC-V (Lowes) to SSA-V, ARC-POS (Washington) (Aug. 3, 1989), at 1 [hereinafter Blocked Accounts Memorandum]; see also POMS SI 01140.215.B.1 (Mar. 1992); POMS SI 01120.010.C.3 (Feb. 1992).

We have advised that, in Ohio, a ward's estate is to be used for his support and maintenance, on petition by the guardian to the probate court, and that funds held in a blocked account under the law of that State generally are presumed to be available to beneficiaries for their support and maintenance, absent a legal restriction on the guardian's use of or access to the funds. See Blocked Accounts Memorandum, supra, at 6; see also POMS SI R01120.010 (May 1991) (regional instructions—Ohio); Ohio Rev. Code Ann. § 2111.13(A)(2)-(3), (B) (Page 1990); In re Burns, 79 N.E.2d 234 (Ohio Ct. App. 1948). We have also noted, however, that in cases in which a minor's estate does not exceed $10,000, the court may, in lieu of establishing a guardianship, direct that the funds be placed in an account that may be structured so that the minor may not access the funds until he reaches majority. Blocked Accounts Memorandum, supra, at 6; see also POMS SI R01120.010 (regional instructions—Ohio). We advised that in such cases you should examine the court order and the account title to determine whether either the individual or a fiduciary has access to the funds and whether the funds are available for support and maintenance. Id.

Here, prior to March 1989, Erik's estate totaled less than $10,000, and the court dispensed with the appointment of a formal guardian pursuant to state law. See Ohio Rev. Code Ann. § 2111.05 (Page 1990). The court ordered that Erik's funds be deposited in a restricted account that would not allow withdrawal of the funds, absent a court order, until Erik attained the age majority, but did not specify who could petition the court for withdrawal. Under state law, however, a minor's parents are his "natural guardians," charged with the care and management of his estate. See Ohio Rev. Code Ann. § 2111.08 (Page Supp. 1992). Erik's parents, therefore, presumably had the power to petition the court on Erik's behalf to withdraw funds. Indeed, Erik's parents did petition for withdrawal of certain funds from the account for Erik in 1988, and the court authorized the withdrawal, referring to the account as a "guardianship account."

Apparently, no restrictions were placed on the types of expenditures that could be requested or authorized, and Erik's parents requested and were granted permission to withdraw funds for uniforms (i.e., clothing) and school expenses. Thus, even prior to the court's formal appointment of a guardian, Erik's funds were apparently available, on petition to the court, for his support and maintenance.

After a guardian was appointed formally and the settlement amounts were placed in the restricted account at Bank One, the funds apparently were still available for Erik's support and maintenance on petition of his guardian (his mother). Nothing in the court documents you provided suggest that the funds were not available for support and maintenance, or that requests for such expenditures would be denied./ Indeed, the court apparently has not denied any requests for expenditures, and has approved expenditures for lunch money (food), clothing, and shoes./ Thus, Erik's estate was apparently available for his support and maintenance at all times, and is therefore a countable resources for SSI purposes.