705.04 Equitable Ownership
A. An equitable ownership interest is a form of ownership that exists without legal title to the real or personal property. It is usually an unwritten ownership interest or right of use which exists despite another individual having legal title.
B. Use of the policy defined in this subsection should enable the Eligibility Specialist to correctly establish the considered value of a customer’s income and resources when real or personal property is held in the customer’s name but the customer affirms that the asset really belongs to someone else.
EXAMPLE:
During the face-to-face interview, when asked whether any assets are held in his name which are not listed on the application form, Mr. Blau indicates that his son’s car is in just his name. Further questioning reveals that Mr. Blau took out a loan with his credit union to purchase this automobile for his son. His son has made all the payments on this loan and has the car in his possession. Mr. Blau says that, because of his son’s recent bankruptcy, this was the only way his son could get a car, which he needs to commute to work. Mr. Blau’s explanation was obtained in writing on the Statement of Facts (DE-118) form, and pended receipt of a written explanation from Mr. Blau’s son.
The Statement of Facts received from Mr. Blau’s son confirmed Mr. Blau’s statement. The son was unable to obtain an auto loan from several banks due to his recent bankruptcy. His father agreed to take out a loan so that he could obtain the needed car. The car is titled to his father since the loan is in his father’s name. Once the loan is paid off, title to the car will be transferred to the son.
The customer has verified that he does not have an equitable interest in this asset, the automobile. It is not, therefore, considered in his financial eligibility determination. The Eligibility Specialist, however, creates a alert to remind himself at the next redetermination to investigate the status of this automobile.
C. The customer’s equitable interest in an unprobated estate (D.1. below), trust (D.2., below), or in an asset held in the name of an agent (MS 705.05) must always be investigated.
The Eligibility Specialist is not otherwise required to investigate the possibility of the customer having an equitable ownership interest in assets not held in the customer’s name.
D. The Eligibility Specialist should be able to resolve whether an equitable ownership interest exists using the following criteria:
1. Unprobated Estate
- For ALTCS purposes, an individual may have an equitable ownership interest in an unprobated estate if he:
- Is an heir or relative of the deceased; or
- Receives income from the property; or,
- Has acquired rights in the property due to the death of the deceased.
2. Trust
- A trust is a right of property established by a trustor or grantor. One party (the Trustee) holds legal title to trust assets which he manages in a fiduciary capacity for the benefit of another (the beneficiary). The beneficiary does not have legal title but does have an equitable ownership interest in the assets held by the trust.
- See Chapter 800 for information on how to treat trusts.
3. Real Property
- An individual may potentially acquire an equitable ownership interest in real property by performing certain activities, such as:
- Making mortgage payments or paying property taxes; or,
- Making or paying for additions to the building's structure; or,
- Making improvements to the shelter.
E. When equitable ownership in real or personal property is either asserted or denied, obtain any pertinent documents and a signed statement from each of the parties involved regarding any arrangement that has been agreed to.
