TN 3 (07-90)
SI 01140.110 Other Property Rights
1. Mineral Rights
Mineral rights represent ownership interest in natural resources such as coal, oil, or natural gas, which normally are extracted from the ground.
2. Timber Rights
Timber rights permit one party to cut and remove free standing trees from the property of another party.
An easement gives one party the right to use the land of another party for a special purpose.
A leasehold gives one party control over certain property of another party for a specified period. In some States, a “lease for life” can create a life estate under common law.
5. Water Rights
Water rights usually confer upon the owner of riverfront or shorefront property the right to access and use the adjacent water.
6. Life Estates
A life estate conveys to the individual to whom it is given certain property rights for the duration of his or her life, or someone else's life. In some cases, it may be conditional: e.g., for life or until remarriage.
The owner of a life estate can sell the life estate but does not have title to the property and thus normally cannot sell it or pass it on as an inheritance.
However, some States allow life estates “with powers,” wherein the owner of the property creates a life estate for himself or herself, retaining the power to sell the property, with a remainder interest to someone else, e.g., a child.
7. Remainder Interests
When the owner of property gives it to one party in the form of a life estate, and designates a second party to inherit it upon the death of the life estate holder, the second party has a remainder interest in the property.
B. Development and Documentation
Treat the items in A. above as real property and develop ownership and value per SI 01140.100. See 4. below for additional instructions regarding life estates and remainder interests.
2. Mineral Rights
Ownership of Land and Mineral Rights
If the individual owns the land to which the mineral rights pertain, the CMV of the land can be assumed to include the value of the mineral rights. Additional development is unnecessary.
Ownership of Mineral Rights Only
If the individual does not own the land to which the mineral rights pertain, obtain a CMV estimate from a knowledgeable source. Such sources include, in addition to those listed in SI 01140.100 D.3.c.:
the Bureau of Land Management;
the U.S. Geological Survey;
any mining company that holds leases.
3. Lease for Life
Refer any “lease for life” agreement and related information via the ARC, Programs to the Regional Attorney for a determination of whether it creates a life estate under State law.
4. Value of Life Estate or Remainder Interest
Using the table in SI 01140.120, multiply the CMV of the property by the life estate or remainder interest decimal that corresponds to the individual's age. Record the result on an RC.
Life Estate With Powers
Since the life estate holder retains the power to sell the property, its value as a resource is its full equity value.
A remainder interest in non-home real property can be documented on the SSR by entering RE75 in the CG (Case Characteristics) field.