You asked about the effect of a divorce and a quitclaim deed on R. P~’s ownership
rights in a home previously owned jointly by him and his former spouse in Fairchild,
Wisconsin, for purposes of determining his eligibility for Supplemental Security Income
(SSI). Specifically, you want to know whether the quitclaim deed indicated that R.
P~ transferred a resource for less than fair market value. For the reasons discussed
below, we believe that after the divorce, R. P~ owned an undivided one-half interest
in the home as a tenant in common under Wisconsin law. This was a countable resource
to R. P~ for SSI purposes. We believe R. P~ transferred this resource for less than
fair market value when he executed the quitclaim deed removing his name and transferring
his ownership interest to his former spouse two months after the divorce.
BACKGROUND
On August 16, 2018, R. P~ and J. P~ filed a joint petition for divorce in the Circuit
Court of Eau Claire County, Wisconsin. At the time, they owned a marital home in Augusta,
Wisconsin (Augusta home). You indicated that R. P~ lived in that home alone.
On August 29, 2018, J. P~ purchased a home in Fairchild, Wisconsin (Fairchild home),
for $36,000, with money she borrowed from another individual, W~. The Fairchild home
was J. P~’s primary residence.
On September 27, 2018, R. P~ and J. P~ sold the Augusta home for $160,000. You indicated
that R. P~ allowed J. P~ to keep all of the proceeds from the sale, which were $44,754.21.
This is corroborated by a signed statement from J. P~ dated October 12, 2018, that
she did not give R. P~ any of the proceeds from the sale of the Augusta home.
In a signed statement dated October 6, 2018, W~ stated that he received $36,105.67
from J. P~ as repayment of her loan for the purchase of the Fairchild home. J. P~
also indicated that she repaid W~ $36,105.67 from the proceeds of the Augusta home
sale.
A quitclaim deed for the Fairchild home dated November 13, 2018, shows J. P~ as the
grantor and “J. P~ and R. P~, husband and wife” as grantees. The deed stated that
it was “executed to create survivorship marital property.” You indicated that the
parties alleged they were separated and not living together during this period.
On March 20, 2019, R. P~ and J. P~ filed an amended marital settlement agreement in
their divorce case. According to this document, both parties owned the Fairchild home
as a primary residence, and they agreed that the property would be awarded to both
of them upon divorce. On March 29, 2019, the circuit court held a stipulated divorce
hearing, at which it granted their divorce. On the same date, the court issued a “Findings
of Fact, Conclusions of Law, and Judgment of Divorce,” which approved and incorporated
the amended marital settlement agreement.
On May 8, 2019, another quitclaim deed was executed for the Fairchild home, removing
R. P~ from the deed “pursuant to divorce.” The accompanying Wisconsin Real Estate
Transfer Receipt shows that the value transferred from R. P~ to J. P~ was $18,000.
DISCUSSION
To be eligible for SSI, an individual’s (and spouse’s, if applicable) resources, other
than resources excluded from consideration by statute, must not exceed the statutory
limit. See 42 U.S.C. § 1382(a); 20 C.F.R. § 416.1205. A resource is defined as: cash
or other liquid assets or any real or personal property that an individual owns and
could convert to cash to be used for support and maintenance. See 20 C.F.R. § 416.1201(a);
POMS SI 01110.100B.1. In determining the resources of an individual, SSA excludes the individual’s home
that is his principal place of residence. See 20 C.F.R. § 416.1212(a);POMS SI 01130.100A, B. The current resource limit for an individual is $2,000.[1] See 42 U.S.C. § 1382(a)(3)(B); 20 C.F.R. § 416.1205(c); POMS SI 01110.003A.2.
In Wisconsin, all property of spouses is presumed to be marital property. See Wis.
Stat. § 766.31(2). Specifically, each spouse has a present undivided one-half interest
in each item of marital property. See id. § 766.31(3). After a dissolution of marriage,
each former spouse owns an undivided one-half interest in the former marital property
as a tenant in common, except as provided otherwise in a decree or an agreement entered
into by the former spouses after dissolution. See id. § 766.75.
Augusta Home
Here, R. P~ had an undivided one-half interest in the Augusta home, which was a marital
home. When he and J. P~ sold the home in September 2018, they each owned half of the
proceeds as spouses. As noted above, J. P~ purchased the Fairchild home with the proceeds
of the Augusta home. Thus, R. P~’s share of the remaining proceeds, after taking into
account the purchase of the Fairchild home, was $4,324.27 ($44,754.21 - $36,105.67
= $8,648.54 ÷ 2 = $4,324.27). This was a countable resource to him. See POMS SI 01110.100A (proceeds from sale of resource are also resources), SI 01110.600B.4 (if individual sells a resource, what he receives in return is a different form of
resource).
By allowing J. P~ to keep all of the proceeds of the Augusta home, R. P~ essentially
conveyed his share of the remaining proceeds to her. We believe this constituted a
transfer of a resource for less than fair market value. See POMS SI 01150.110 (explaining period of ineligibility for SSI for transfers of resources for less than
fair market value on or after 12/14/1999). However, there is an exception for a transfer
of a non-home resource for less than fair market value to a spouse (including a separated
spouse), so the period of ineligibility would not apply here. See POMS SI 01150.123A.
Fairchild Home
R. P~ also had an undivided one-half interest in the Fairchild home, which J. P~ bought
during their marriage in August 2018. As noted above, in November 2018 a quitclaim
deed was executed establishing the Fairchild home as “survivorship marital property”
of R. P~ and J. P~.[2] Under Wisconsin law, survivorship marital property indicates an intent to establish
a joint tenancy exclusively between spouses. See Wis. Stat. § 766.60(4)(b)(1)(a),
(5). On the death of a spouse, the ownership rights of that spouse in the property
vest solely in the surviving spouse by nontestamentary disposition at death. See id
. § 766.60(5).
Moreover, when R. P~ and J. P~ divorced in March 2019, the Fairchild home was awarded
to both parties, pursuant to the amended marital settlement agreement which was approved
by the circuit court. This was consistent with Wisconsin law. See Wis. Stat. § 766.75
(after a dissolution, each former spouse owns undivided one-half interest in former
marital property as tenant in common, except as provided otherwise in a decree or
agreement entered into by the former spouses after dissolution). There is no evidence
of a different disposition in the divorce decree or of any agreement between R. P~
and J. P~ after the divorce. As a result, after the divorce R. P~ had an undivided
one-half interest in the Fairchild home as a tenant in common. Since the purchase
price of the home in August 2018 was $36,000, the approximate value of R. P~’s interest
in the home after the divorce was $18,000. Under the agency’s SSI rules, this was
a countable resource to R. P~.[3] See POMS SI 01140.100B (policy for non-home real property).
Thereafter, in May 2019, R. P~ executed a quitclaim deed transferring his interest
in the Fairchild home to J. P~. According to a Wisconsin Real Estate Transfer Receipt,
the value transferred was $18,000. Thus, we believe that R. P~ transferred a resource
for less than fair market value.[4] See POMS SI 01150.110 (explaining period of ineligibility for SSI for transfers of resources for less than
fair market value on or after 12/14/1999).
CONCLUSION
For the reasons discussed above, we believe that after his divorce from J. P~ in March
2019, R. P~ owned an undivided one-half interest in the Fairchild home as a tenant
in common, which was a countable resource for SSI purposes. R. P~ subsequently transferred
this resource for less than fair market value when he executed a quitclaim deed removing
his name from the Fairchild home.