Real Property

Real Property

Issue

The issue in this case scenario is that Barry wants to transfer his only asset, his 'real property' to his wife so that he can be eligible to apply for government assistance like Medicaid if he so wishes as well as ensuring that no creditors would be able to claim any share in the property during his wife, Lucy's lifetime. Moreover, he needs to know how to distribute interest and tenancies in the property as he also has three children whom he has to care for. Therefore, he needs to be given advice on how and what kind of deed should he use to convey the property.

Rule

There are a number of laws and rules which have to be taken into consideration while advising Barry of his natural rights and legal options. Two laws under the Deficit Reduction Act of 2005 will come into play in the given scenario. Section 6014 (2), states that: “the individual shall not be eligible for such assistance if the individual's equity interest in the individual's home exceeds $500,000.” This means that any individual who has any assets of or over $500,000 will not be eligible to apply for Medicaid.

Section 6011 (a) of the DRA 2005 states the legal requirements for Medicaid which has now officially been lengthened to 5 years: “lengthening look-back period for all disposals to 5 years.” This means that all the eligibility for any persons applying for government paid Medicaid are only eligible if they have transferred their assets or property before a five year period as the courts will “look back” to determine if the person applying transferred the asset just so that he/she could be eligible for state provided healthcare.

For the purpose of the given scenario, a quitclaim deed can be used to transfer the mentioned asset, where the transferor transfers the mentioned property to the transferee without any promises or warranties towards the property. Another consideration which can come into play is transferring the deed in a “fee simple absolute” which allows for the “highest level of ownership.” Therefore, it allows the owner to possess complete control over the property which can also be transferred to his/her heirs upon their death. In the case of “Harper v. Paradise,” the property was transferred in the name of Maude Harper by Susan Harper's heirs in a quitclaim deed by fee simple absolute.

Another factor which will be discussed in the given case is joint tenancy. This is where two or more individuals can own a property, where each owns and undivided share in the same concern.

Application

To address the first issue faced by Barry, which is his wish to claim government assistance like Medicaid, some specific laws which have been listed above will come into play. In order to be eligible for such assistance like Medicaid, Barry will have to have under $500,000 as outlined by Section 6014 (2) of the DRA. At the moment, he owns a house which is worth this amount exactly so he is not ...