TN 8 (01-12)

PS 01805.007 Colorado

A. PS 12-040 Colorado Property – Intestate Law (Elva)

DATE: January 10, 2012

1. SYLLABUS

An SSI recipient in Colorado has always lived in a house owned by her father. The father’s name is on the deed, indicating he acquired the house in 1947. The father died in 1970 and his widow, the recipient’s mother, never remarried and died in 1992. The recipient continued to live in the house but no notations are shown on the deed since the father acquired the house. The issue is whether the SSI recipient is the legal owner of the house. If an SSI recipient lives in his or her own house, the house does not count as a resource for SSI purposes.

The Regional Chief Counsel, Region VIII, Denver, has determined that the SSI recipient is the legal owner of the house. That the deed was not updated to reflect the recipient’s (or her mother’s) ownership is not material. Under Colorado law, legal title to real property vests immediately in heirs at the moment of the decedent’s death. For this recipient, her house is excluded from resources. In addition, because she owns her home and lives in it, she is not getting in-kind support and maintenance in the form of rent-free shelter, and the one-third reduction rule (VTR) does not apply.

2. OPINION

Question Presented

You asked us to determine whether Elva, a Supplemental Security Income (SSI) recipient, has equitable ownership interest in the home where she resides. If not, you indicated SSA “will charge her rent-free shelter.” You also noted that if an SSI recipient lives in his or her own household, the value of the one-third reduction (VTR) never applies.

Short Answer

We did not need to reach the issue of an equitable ownership interest. Under Colorado’s intestate succession laws, Elva is the legal owner of the home.

Background

Elva is a 79-year-old SSI recipient. She is an only child and lived in the home with her parents until her father, Inocencio, died in May 1970. Elva subsequently lived in the home with her mother, until her mother died in July 1992. You informed us that Elva’s mother never remarried. Elva alleged that her deceased father was sole owner of the home and did not have a will. A copy of the deed shows that in 1947, Joseph executed a quitclaim deed transferring his “right, title, interest, claim and demand” in the property described to “Enoch ” in consideration of “[o]ne Dollar and other considerations[.]” According to Elva, “Enoch ” was one of her father’s “nicknames.” You indicated the deed has never been changed or modified to show anyone else as owner of the property. Elva pays all the bills associated with the home, including property taxes.

Discussion

You asked us to determine whether Elva has an equitable ownership interest in the home. However, we did not need to reach this issue. As explained below, although the deed is not in her name, Elva legally owns the property in fee simple. See POMS SI 01110.515(A) (fee simple ownership is absolute and unqualified legal title to real property, whereas equitable ownership is a form of ownership that exists without legal title to property).

Initially, we considered the original validity of the deed. “[A] deed to an existing person as grantee who is described by a fictitious or assumed name is valid.” 23 Am. Jur. 2d Deeds § 21 (2011); see also id. Deeds § 29 (“The rule that a deed which names as grantee a nonexistent person is void [does not] appl[y] to the situation where a person in existence is described by a fictitious or assumed name”); 4 Tiffany Real Prop. § 967 (2011) (same). If Elva’s father was “identifiable as the grantee named in the deed, the deed is valid.” 23 Am. Jur. 2d Deeds § 29 (2011). We did not receive any evidence to contradict Elva’s identification of Enoch as Inocencio, her deceased father.

Elva’s father died domiciled in Colorado in May 1970, survived by his wife and his only child (Elva). According to Colorado’s law of intestate succession in effect at that time,1 one half of Inocencio’s real and personal property passed to his wife, and one half passed to Elva. See Memorandum from Ass’t Reg. Attorney (Bossert), Denver, to Reg. Comm., SSA, Ownership Interest in an Unprobated Estate in Colorado (Oct. 24, 1980) (describing intestate succession provision in effect in 1970). Thus, as of May 1970, Elva owned a one-half interest in the home. Elva’s mother never remarried and did not have a will; as such, when the mother died in July 1992, her one-half share of the property passed to Elva. See Colo. Rev. Stat. Ann. § 15-11-103(1)(a) (1992) (“[T]he entire estate if there is no surviving spouse passes . . . [t]o the issue of the decedent . . . .”).

That the deed was not updated to reflect Elva’s (or her mother’s) ownership is not material. Under Colorado law, legal title to real property vests immediately in heirs at the moment of the decedent’s death. See Hanson v. Dilley, 418 P.2d 38, 41 (Colo. 1966).2 Thus, Elva legally owns the home.

In sum, the real property at issue is Elva’s “home” because “she has an ownership interest and [it] serves as . . . her principle place of residence.” POMS SI 01130.100(A)(1) & (2). Therefore, the property is an excluded resource, and SSA cannot charge her rent-free shelter. See POMS SI 01130.100(B)(1) (Policy for excluding the home); POMS SI 00835.370 (“Shelter is rent-free when no household member has any ownership interest in, or rental liability for, the residence.”). Further, since Elva owns the home, the VTR does not apply. See POMS SI 00835.110(A).

Conclusion

Elva legally owns the home, and it is her principal place of residence. Therefore, the home is an excluded resource, SSA cannot charge her rent-free shelter, and the VTR does not apply.

John Jay Lee
Regional Chief Counsel, Region VIII

By:___________________________
Yvette G. Keesee
Assistant Regional Counsel

B. PS 06-184 Effect of Unwritten Restriction on Quitclaim Deed on Resale of Real Property in Colorado

DATE: July 5, 2006

1. SYLLABUS

This opinion evaluates an SSI deemor's allegation that real property conveyed to her via quitclaim deed is not a countable resource due to an unwritten restriction. The deemor was sold real property via quitclaim deed from her father. The quitclaim deed granted the deemor full rights to the property without exception. The deemor alleged that she could not sell the property due to a verbal agreement with her father that she would keep the property for purposes of building a future home site. The Colorado statute of frauds provisions establish that the specific terms and conditions associated with conveyance of real estate must be in writing. Restrictions that are not included in the original conveyance are not considered part of the transaction. Therefore, the property is a countable resource despite the deemor's claim of a restriction to sell or otherwise transfer the property.

2. OPINION

Issue

You requested an opinion on whether, under Colorado law, an unwritten restriction on a real estate quitclaim deed would prevent resale of the property.

Short Answer

In Colorado, a real estate quitclaim deed cannot be modified by an unwritten restriction. The holder of the quitclaim deed may sell her property interest without consideration of the unwritten restriction.

Facts

The facts you have provided show that Audrea, the mother of a potential SSI child beneficiary, was conveyed real property valued at $62,000 by her father, Eddie , for one dollar. The February 27, 2006 quitclaim deed effecting that conveyance stated that it was granting "all the right, title, interest, claim and demand which the grantor(s) had in and to the real property" to Audrea. In a statement dated April 13, 2006, Audrea related that she had been given the property as a future homesite, and had verbally agreed not to sell it. She admitted that she could sell the property if she wanted to, but "would not go back on my word." In a brief letter to an SSA employee dated May 1, 2006, Eddie stated that "[t]he property is restricted to any sale and is intended solely for her building a house on it at some future date."

Discussion

In Colorado "[n]o estate or interest in lands[] . . . nor any trust or power over or concerning lands or in any manner relating thereto shall be created, granted, assigned, surrendered, or declared, unless by act or operation of law, or by deed or conveyance in writing" (emphasis added). Similarly, "[e]very contract . . . for the sale of any lands or any interest in lands is void unless the contract or some note or memorandum thereof expressing the consideration is in writing" (emphasis added). These statute of frauds provisions unequivocally state that conveyance of real estate or a contract for the conveyance of real estate must be in writing.e have such a written document here - the quitclaim deed Eddie executed conveying the property to Audrea. That document did not restrict Audrea's interest in the property, however, as it expressly granted her all of Eddie's rights in the property. Whatever their verbal understanding regarding the future use of the property as a home for Audrea, there was no restriction as to her use of the property in the deed, and there was apparently no written contract of sale. In addition, the law presumes that fee simple (all) real property interests are being conveyed in the absence of express terms to the contrary. Accordingly, by the written terms of the deed, and by operation of law, Eddie conveyed all his interest in the property to Audrea without restrictions. Their alleged verbal understanding cannot modify the express terms of the quitclaim deed.

Similarly, Eddie's May 1, 2006 letter to an SSA employee is not a writing that can restrict the property. The property was conveyed to Audrea on February 27, 2006, so the letter post-dates the conveyance of the property and cannot be considered part of that transaction. On its face, it is merely a letter to an individual who was not a party to the real estate conveyance. Further, Eddie's letter does not purport to be part of the quitclaim deed or part of a contract for sale, nor could its terms be so construed. Eddie's letter cannot modify the quitclaim deed conveying his entire interest in the property to Audrea.

Conclusion

Accordingly, we advise that:

(1) The quitclaim deed executed by Eddie conveyed all of his interest in the property to Audrea. Their alleged oral agreement that she would use the property for her home site in the future and would not sell it is ineffective to restrict Audrea's ownership interest, as under Colorado law restrictions on property interests must be in writing.

(2) Eddie's May 1, 2006 letter, which post-dates the conveyance of the property to Audrea, cannot modify the quitclaim deed conveying his entire interest in the property to Audrea.

(3) Audrea has an ownership interest in the real property conveyed to her by Eddie, has the right to access it, and has the legal ability to use it for personal support and maintenance.

Deana R. Ertl-Lombardi
Regional Chief Counsel, Region VIII

By:___________________________
Wayne M. Stanley
Assistant Regional Counsel

C. PS 02-078 Uniform Gifts

DATE: May 8, 2002

1. SYLLABUS

This opinion addresses two different issues related to the Uniform Gifts to Minors Act for Region VIII. The first issue concerns the age at which a recipient of a gift under the Uniform Gifts to Minors Act has the right to liquidate the gift. The opinion summarizes the law for each State. The second issue addressed is whether the law of the State in which the child currently resides is controlling with respect to the age at which custodial property must be transferred to the minor. As outlined in the opinion, the law of the State in which the child currently resides is not controlling under the current laws of any state in Region VIII.

2. OPINION

You have asked us: (1) whether the age at which a recipient of a gift under the Uniform Gifts to Minors Act has the right to liquidate the gift has changed since April 1992, and (2) whether the law of the State in which the child currently resides is controlling with respect to the age at which custodial property must be transferred to the minor.

We will answer the second question first, as it is the less complicated of the two. Our Opinion of October 12, 1999, “Age of Majority under the Uniform Transfers to Minors Act” is correct and applicable to all of the States in Region VIII. The law of the State in which the child currently resides is not controlling under the current laws of any State in Region VIII. All of the States have adopted a provision of the Uniform Transfers to Minors Act (UTMA) which provides:

This chapter applies to a transfer that refers to this chapter . . . by which the transfer is made if at the time of the transfer, the transferor, the minor, or the custodian is a resident of this state or the custodial property is located in this state. The custodianship so created remains subject to this chapter despite a subsequent change in residence of a transferor, the minor, or the custodian or the removal of custodial property from this state.

See CRSA § 11-50-103, MCA § 72-26-503, NDCC § 47-24.1-02, SDCL § 55-10A-2, UCA § 75-5a-103, WS § 34-13-115. (Emphasis added.) Thus, the law of the state in which the transfer was made now expressly states which law applies.

As to your first question, we have reviewed the provisions and the information set forth in POMS Section “SI R01120.205 DEN B UNIFORM GIFTS TO MINORS ACT,” which you have included with your request and have asked us to update. The Section accurately summarizes the law of South Dakota and Montana. The provisions pertaining to the laws of Colorado, North Dakota, Utah, and Wyoming must be changed.

The UTMA was adopted (and the Uniform Gifts to Minors Act (UGMA) repealed) by Colorado on July 1, 1984; Montana on October 1, 1985; North Dakota on July 1, 1985; South Dakota on July 1, 1986; Utah on July 1, 1990; and Wyoming on May 22, 1987. Custodianships created in those States prior to those dates will continue to terminate at the age prescribed under their respective versions of the UGMA.

The UTMA divides transfers to minors into four categories: (1) transfer by gift or exercise of power of appointment, (2) transfer authorized by will or trust, (3) other transfer by fiduciary, and (4) transfer by obligor. In Colorado and South Dakota, the age at which custodial property must be transferred to the minor is the same for all four types of transfers. In Montana, North Dakota, Utah, and Wyoming, property created by transfers described in (1) and (2) above must be transferred to the minor at age 21, and property created by transfers described in (3) and (4) above must be transferred to the minor at age 18. The applicable UTMA provisions of each State are summarized below.

Colorado

Regardless of the type of transfer by which the property was created, the custodian must transfer property to the minor or the minor's estate upon the earlier of (1) the minor attaining the age of 21, or (2) the minor's death. CRSA §§ 11-59-105, 106, 107, 108, 121.

Montana

The custodian shall transfer custodial property to the minor or the minor's estate upon the earlier of: (1) the minor's attainment of the age of 21, with respect to custodial property transferred by gift, exercise of power of appointment, will, or trust; (2) the minor's attainment of the age of 18 with respect to other transfers by fiduciaries or transfers by obligors; or (3) the minor's death. MCA §§ 72-26-604, 605, 606, 607, 803.

North Dakota

The custodian shall transfer custodial property to the minor or the minor's estate upon the earlier of: (1) the minor's attainment of the age of 21, with respect to custodial property transferred by gift, exercise of power of appointment, will, or trust; (2) the minor's attainment of the age of 18 with respect to other transfers by fiduciaries or transfers by obligors; or (3) the minor's death. NDCC §§ 47-24.1-04, 05, 06, 07, 20.

South Dakota

Regardless of the type of transfer by which the property was created, the custodian shall transfer custodial property to the minor or the minor's estate upon the earlier of: (1) the minor's attainment of the age of 18, or (2) the minor's death. SDCL §§ 55-10A-4, 5, 6, 7, 22.

Utah

The custodian shall transfer custodial property to the minor or the minor's estate upon the earlier of: (1) the minor's attainment of the age of 21, with respect to custodial property transferred by gift, exercise of power of appointment, will, or trust; (2) the minor's attainment of the age of 18 with respect to other transfers by fiduciaries or transfers by obligors; or (3) the minor's death. UCA 1953 §§ 75-5a-105, 106, 107, 108, 121.

Wyoming

The custodian shall transfer custodial property to the minor or the minor's estate upon the earlier of: (1) the minor's attainment of the age of 21, with respect to custodial property transferred by gift, exercise of power of appointment, will, or trust; (2) the minor's attainment of the age of 18 with respect to other transfers by fiduciaries or transfers by obligors; or (3) the minor's death. WS 1977 §§ 34-13-117, 118, 119, 120, 133.

Deana R. Ertl-Lombardi
Regional Chief Counsel, Region VIII

By:___________________________
Thomas S. Inman
Assistant Regional Counsel


Footnotes:

[1]

The law of an intestate’s domicile at the time of his or her death governs the descent and distribution of the individual’s property. See Blatt v. Blatt, 243 P. 1099, 1102 (Colo. 1926) (applying law of state where decedent was domiciled at the time of death); Matter of G~’s Estate, 616 P. 2d 186, 187 (Colo. App. 1980) (change to probate code applied only to decedents dying on or after effective date).

[2]

POMS SI 01110.515(C)(1) provides that SSA may determine “an individual . . . [has] an equitable interest in an unprobated estate if he or she . . . has acquired rights in the property due to the death of the deceased in accordance with State intestacy laws.” We presume this is why you asked whether Elva has an equitable interest in the home. However, here, where legal title to real property vested immediately in the heirs at the time of the owner’s death, this determination was unnecessary.


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PS 01805.007 - Colorado - 01/18/2012
Batch run: 01/18/2012
Rev:01/18/2012