TN 3 (01-12)
PS 01815.006 California
A. PS 12-031 Unprobated California Estate: Tony
DATE: December 19, 2011
This decision shows that residency in an unprobated house that a recipient is the sole heir to is sufficient to establish the exclusion for home property. The decision also clarifies that the obligation to make mortgage payments is sufficient to prevent in kind support and maintenance (ISM) being charged.
You asked whether a house, belonging to the unprobated estate of Tony’s sister, and occupied by Tony as his primary residence, is countable to him as a resource for purposes of determining his eligibility for Supplemental Security Income (SSI). You also asked whether Tony received unearned income through in-kind support and maintenance (ISM) because he lives in the house without paying mortgage or rent.
The house is not a countable resource to Tony, and his failure to make mortgage payments does not constitute ISM.
SUMMARY OF EVIDENCE
Tony is the sole heir of his sister’s estate. His sister owned a home that Tony still occupies as his primary residence. Currently, Tony is not paying mortgage or rent for his use of the house. His sister’s house is still in probate because her estate cannot afford to satisfy a city loan secured against the property or pay property taxes amounting to $11,000.00. Additionally, the estate does not have funds to pay accrued attorney fees for probate related services.
An individual with resources that exceed the statutory limit are not eligible for SSI benefits. See Program Operations Manual System (POMS) SI 01110.003. Unprobated property may be countable as a resource to an individual that has an ownership interest in the property and is an heir of the deceased. See POMS SI 01120.215(A). An ownership interest in unprobated property exists if an individual has use of a deceased’s property, or documents indicate that the individual is heir to the property. Id. As his sister’s sole heir, and as an occupant of the house, Tony has an ownership interest in the real property. However, it is premature to attribute the house to Tony as a resource. California Probate Code § 7001 provides that a decedent’s property is subject to administration and is subject to the rights of beneficiaries, creditors, and other persons as provided by law. Cal. Prob. Code § 7001.
Here, the house has at least one outstanding loan and outstanding property taxes. Unless his sister’s estate has funds to satisfy those debts, the property may be subject to foreclosure. At the very least, the estate’s inability to pay such debts inhibits Tony’s ability to sell the house. See 20 C.F.R. § 416.1201(a) (for real property to be considered a resource, an individual must be able to liquidate his right to that real property); see also POMS PS 01405.006 (noting that, during probate, an individual cannot readily obtain and liquidate estate property because it is subject to sale in order to pay creditors). Accordingly, it would be premature to attribute the house as Tony’s current resource.
Moreover, the home exclusion rule precludes the house from being counted as Tony resource. See POMS SI 01130.100. An individual’s home, regardless of value, is an excluded resource. See POMS SI 01130.100(B)(1). An individual’s home is property in which he has an ownership interest and serves as his principal place of residence. POMS SI 01130.100(A)(1). As discussed, Tony has an ownership interest in the unprobated house because he occupies the house and he is the only heir to his sister’s estate. Additionally, Tony uses the house as his primary residence. Accordingly, the house is excluded as a resource.
Finally, Tony occupation of the house is not considered ISM. Pursuant to Administrative Message (AM) 09060(E)(2), the Agency does not consider nonpayment of mortgage to be ISM because the obligation to pay still exists. Although, the obligation to pay mortgage resides with Ms. D~’s estate rather than Tony, the reasoning remains the same. Whatever ownership interest Tony has in the house is subject to the house clearing probate. The failure of Tony to pay mortgage presents the risk that the secured lender may foreclose on the property, ending Tony interest in and possession of the property. Accordingly, Tony has an interest in seeing that the mortgage is paid, and his failure to satisfy those payments does not forgive the estate’s obligation to pay. Thus, finding Tony nonpayment of mortgage to be ISM would not be appropriate.
Even if the house would otherwise be a resource to Tony, it falls under the home exclusion rule. Furthermore, Tony occupation of the house without paying rent or mortgage is not ISM because the obligation to pay the mortgage remains, even if that obligation is not satisifed.