Kan. Admin. Regs. § 129-6-109

Current through Register Vol. 43, No. 46, November 14, 2024

Section 129-6-109 - Personal property

(a) Definitions. For purposes of this regulation, each of the following terms shall have the meaning specified in this regulation:

(1) "Cash assets" means the following resources:

(A) Cash surrender or loan values of life insurance policies;

(B) investments;

(C) money;

(D) similar items from which a determinate amount of money can be realized; and

(E) trust funds.

(2) "Other personal property" means the following:

(A) Contracts from the sale of property;

(B) equipment;

(C) home produce;

(D) household equipment and furnishings;

(E) inventory;

(F) livestock;

(G) personal effects;

(H) similar items from which a determinate amount of money can be realized; and

(I) vehicles.

(3) "Personal property" means all property, excluding real property.

(b) Treatment of personal property. Personal property, unless exempted, shall be considered a resource. Each trust fund shall be subject to subsection (c).

(c) Treatment of trust funds. For purposes of determining an individual's eligibility for assistance or the amount of assistance, the requirements in this subsection shall apply to trust funds. The term "trust" shall include any legal instrument or device that is similar to a trust, including an annuity. The term "assets" shall be defined as specified in K.A.R. 129-6-57(a).

(1) For a revocable trust, the value of the trust shall be considered a resource available to the individual. Payments from the trust to or for the benefit of the individual shall be considered to be income. All other payments made from the trust shall be considered under the property transfer provisions of K.A.R. 129-6-57.

(2) For an irrevocable trust established after August 10, 1993, the following requirements shall apply:

(A) If there are any circumstances under which payment from an irrevocable trust could be made to the individual or for the benefit of the individual, the portion of the trust from which payment could be made shall be considered as a resource available to the individual. Each payment made from the trust to the individual or for the benefit of the individual shall be considered income. All other payments made from the trust shall be considered under the property transfer provisions of K.A.R. 129-6-57.

(B) Each portion of the trust from which no payment could be made to the individual under any circumstances shall be considered under the transfer of assets provisions of K.A.R. 129-6-57 from the date of establishment of the trust or, if later, the date on which payment to the individual was restricted or foreclosed.

(C) An individual shall be considered to have established a trust if any assets of the individual were used to form all or part of the trust and if any of the following individuals established the trust, other than by will:

(i) The individual or the individual's spouse;

(ii) any person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or the individual's spouse; or

(iii) any person, including any court or administrative body, acting at the direction or upon the request of the individual or the individual's spouse.

(D) If the principal of the trust includes assets of any other person or persons, this subsection shall apply to the portion of the trust attributable to the assets of the individual.

(E) This subsection shall apply without regard to the purposes for which the trust was established, whether or not the trustees have or exercise any discretion under the trust, any restrictions on when or whether distributions can be made from the trust, or any restrictions on the use of distributions from the trust.

(F) This subsection shall not apply to a trust that contains the assets of an individual under the age of 65 who meets the blindness or disability criteria of K.A.R. 129-6-85 and that is established for the benefit of the individual by a parent, grandparent, or legal guardian of the individual, or a court. The state shall receive all amounts remaining in the trust upon the death of the individual, up to an amount equal to the total medical assistance paid on behalf of the individual;

(G) This subsection shall not apply to a trust that contains the assets of an individual who meets the blindness or disability criteria of K.A.R. 129-6-85 if the trust meets all the following conditions:

(i) The trust is established by a nonprofit association.

(ii) A separate account is maintained for each beneficiary of the trust.

(iii) Accounts in the trust are established solely for the benefit of individuals who meet the blindness or disability criteria of K.A.R. 129-6-85.

(iv) Each account in the trust is established by that individual; the parent, grandparent, or legal guardian of the individual; or a court. The state shall receive all amounts remaining in the individual's account upon the death of the individual, up to an amount equal to the total medical assistance paid on behalf of the individual.

Establishment of a trust under paragraph (c)(2)(G) for an individual who is at least 65 shall be subject to the transfer of assets provisions of K.A.R. 129-6-57.

(H) The requirements of K.A.R. 129-6-109(c)(2) shall be waived if the secretary determines that a waiver is necessary to avoid undue hardship on the individual. A finding of undue hardship may be granted if the individual verifies that all of the following conditions have been met:

(i) The individual has exhausted all legal remedies for gaining access to the principal or income of the trust.

(ii) All otherwise available assets have been expended to meet living and medical expenses.

(iii) The individual's health or life would be endangered if the individual were deprived of medical care.

(3) For an irrevocable trust established with the individual's own assets on or before August 10, 1993, the following provisions shall apply:

(A) The trust shall be considered available up to the maximum value of the funds that can be made available under the terms of the trust on behalf of the individual if both of the following conditions are met:

(i) The individual is a beneficiary.

(ii) The trustees are permitted to exercise any discretion with respect to distribution to the individual.

(B) The trust may be established by the individual, the individual's spouse or parent, a legal guardian, or a legal representative who is acting on behalf of the individual.

(C) The amount from the trust that shall be considered as an available resource is the amount that could have been distributed but was not distributed within an eligibility base period. Each amount actually distributed shall be regarded as income. Each portion of the trust that is unavailable to the individual or is not used for the benefit of the individual shall be considered a transfer of property for less than fair market value in accordance with K.A.R. 129-6-57.

(D) K.A.R. 129-6-109(c)(3) shall not be applicable to any trust established before April 7, 1986 if the individual is a developmentally disabled individual who is residing in an intermediate care facility for people with intellectual disability and the trust is solely for the benefit of the individual.

(4) For any other trust, including a trust established with assets of someone other than the individual, the trust shall be considered available to the individual only if the individual has the ability to revoke or terminate the trust or to direct the use of the trust assets for the individual's own support and maintenance. Mandatory periodic payments received from a trust by the individual shall be considered an available resource equal to the present value of the anticipated payments, unless there is a valid spendthrift clause or other language in the trust that specifically prohibits anticipation of payments. If a valid spendthrift clause or other restrictive language exists, the periodic payments shall be considered countable unearned income.

(d) Treatment of annuities. The term "annuity" shall include any contract or device that conveys a right to receive a fixed, periodic source of income for a specified period of time. For purposes of determining an individual's eligibility for assistance or the amount of assistance, the following requirements shall apply:

(1) Each individual requesting medical assistance shall disclose any interest in an annuity. Failure to meet this requirement shall result in ineligibility for medical assistance due to noncooperation in accordance with K.A.R. 129-6-56.

(2) Retirement annuities, including civil service and railroad retirement annuities, shall be exempt as a resource, but the income received shall be countable unearned income.

(3) All other revocable and irrevocable annuities, including those reported to be nonassignable, shall be presumed to be an available resource. The right to either the principal or the income stream from an annuity shall be considered a countable resource. If the annuity can be sold, assigned, encumbered, or structured so that the benefit of the annuity can be received by someone other than the designated beneficiary, the annuity shall be considered available and shall be assigned a value.

(4) The fair market value of a revocable annuity shall be the cash value of the annuity. The fair market value of an irrevocable annuity shall be the amount yet to be paid out under the terms of the contract.

(5) If the individual can furnish evidence from a reliable source that the annuity or the income stream from the annuity is not able to be received by someone other than the designated beneficiary, the annuity shall be reevaluated. Reliable sources concerning the availability of the annuity or income stream shall include banks and other financial institutions, insurance companies, and brokers.

(e) Exempted personal property. The resource value of the following types of personal property shall be exempt:

(1) Personal effects;

(2) household equipment and furnishings in use or only temporarily not in use;

(3) tools in use and necessary for the maintenance of a house or a garden;

(4) the stock and inventory of any self-employed person that are reasonable and necessary in the production of goods and services;

(5) items for home consumption, which shall consist of the following:

(A) Produce from a garden consumed from day to day and any excess that can be canned or stored; and

(B) a small flock of fowl or herd of livestock that is used to meet the food requirements of the family;

(6) cash assets that are traceable to income exempted as income and as a cash asset;

(7) any contract for the sale of property, if the proceeds from the contract are considered as income and the income is consistent with the repayment terms and conditions specified in the written contract;

(8) one vehicle for each family group receiving medical assistance if the primary purpose of the vehicle is to serve the needs of that family group. If someone who is not a member of that family group has the primary use, enjoyment, and possession of the vehicle, the vehicle shall not be exempted under this paragraph. Additional vehicles may be exempt if used over 50 percent of the time for employment or self-employment, if used as the family's home, if needed for medical treatment of a specific medical problem, or if specially equipped for use by a handicapped person;

(9) any individual development account (IDA) that meets the following requirements:

(A) The account shall be established by or on behalf of a temporary assistance for needy families (TANF) recipient or by or on behalf of an individual participating in the assets for independence demonstration program (AFIA) and shall be used for a qualified purpose. A qualified purpose shall mean one or more of the following: postsecondary education expenses for college or vocational-technical school, excluding learning quest and other 529 accounts; first home purchase, if the person has not owned a home within three years of acquisition; or business capitalization, if the business plan has been approved by a financial institution or nonprofit loan fund. All funds withdrawn from an IDA and used for any purpose other than one of those listed in this paragraph shall count as unearned income in the month withdrawn; and

(B) the IDA shall be a trust funded through periodic contributions by the establishing individual and may be matched by or through a qualified entity for a qualified purpose. A qualified entity to match IDA funds for a TANF recipient shall be either a not-for-profit organization described in 8 U.S.C. 501(c)(3) and exempt from taxation under 8 U.S.C. 501(a) or a state or local government agency acting in cooperation with a 501(c)(3) organization. For AFIA participants, matching contributions shall be made by the federal government through a grantee;

(10) low-income family postsecondary savings accounts incentive program established pursuant to K.S.A. 2012 Supp. 75-650, and amendments thereto;

(11) life insurance that is owned by an applicant or recipient if one of the following conditions is met:

(A) The policy has no potential cash surrender value;

(B) the policy does not exceed $1,500 face value. The face value shall not include and shall not be increased by accumulated dividends, but shall be decreased by any outstanding policy loan. If the total face value of insurance policies owned by any one individual exceeds $1,500, the total cash surrender value of those policies shall be a nonexempt resource; or

(C) the policy is in excess of $1,500 face value and has been irrevocably collaterally assigned to the state. The assignment shall be for an amount not to exceed the amount of benefits paid under the medical assistance program for the individual;

(12) any personal property of a blind or disabled person that is covered by an approved plan of self-support;

(13) burial spaces in accordance with the following:

(A) "Burial spaces" shall mean conventional grave sites, crypts, mausoleums, caskets, urns, and other repositories that are traditionally used for the remains of deceased persons. This term shall include vaults, headstones, and grave markers, as well as monies set aside for opening and closing the grave; and

(B) burial spaces purchased through a revocable or irrevocable prepaid contract shall be exempt under this paragraph, including the account in which the funds are deposited under the contract and the interest that accrues on the funds;

(14) burial funds of up to $1,500 each, plus any interest that has accumulated in that fund beginning with the month of application but no earlier than November 1, 1984, for members of the assistance plan that are separately identifiable and clearly designated as set aside for each member's burial expenses. "Burial funds" shall mean revocable burial contracts and trusts as well as other revocable burial arrangements:

(A) The fund shall be considered separately identifiable if it is set up in a separate account and not commingled with any other funds, except funds for burial purposes including a prepaid contract fund for burial merchandise in accordance with paragraph (e)(13);

(B) the fund shall be considered as clearly designated if the account is noted "for burial purposes only" or if the client provides a signed, written statement attesting to the fact that the funds have been set aside and are intended for burial purposes only;

(C) if the fund is exempted and the client withdraws all or a portion of the funds, the amount withdrawn shall be considered as a nonexempt resource and, if transferred, shall be subject to the transfer provisions of K.A.R. 129-6-57;

(D) the $1,500 amount that can be exempted under paragraph (e)(14) shall be reduced by the amount of any irrevocable burial agreements established under K.S.A. 16-303 and amendments thereto, except to the extent that the irrevocable burial agreement represents excludable burial spaces under paragraph (e)(13), as well as the face value of all life insurance policies that do not exceed the $1,500 face value limitation in accordance with paragraph (e)(11). The face value of life insurance policies that exceed this $1,500 limit shall not reduce the amount that can be exempted for burial purposes;

(15) proceeds from the sale of a home if the proceeds are conserved for the purchase of a new home and the funds so conserved are expended or committed to be expended within three months of the sale;

(16) a retroactive social security payment received by the applicant or recipient or an ineligible legally responsible person for the nine months following the month of receipt;

(17) the cash value of pension plans or funds under any of the following conditions:

(A) The person is employed and would have to terminate employment in order to obtain any payment. Each pension plan or fund that can be converted to periodic payments shall be exempt if the plan or fund is converted to periodic payments by the month following the month in which the plan or fund is eligible for conversion;

(B) the person is not retired or claiming permanent disability; or

(C) the applicant's or recipient's spouse or parent has funds in a work-related pension plan or fund, including Keogh plans, and IRAs and is not applying for or receiving medical assistance;

(18) retirement accounts and pensions of any employed individual who meets the requirements of K.A.R. 129-6-88;

(19) income-producing personal property, other than cash assets, that is essential for employment or self-employment or producing income consistent with its fair market value. Income-producing property may include any of the following items:

(A) Tools;

(B) equipment;

(C) machinery; or

(D) livestock;

(20) escrow accounts established for families participating in the family self-sufficiency program through the U.S. department of housing and urban development. Interest earned on the accounts shall also be exempted as income; and

(21) monies paid as part of a contract or agreement to receive medical or assistive services from an unlicensed individual or entity if all of the following conditions are met:

(A) A written contract is executed before providing or paying for any service. The contract shall specify services to be provided and the rates for these services;

(B) the contracted amount paid for services is consistent with the market rate for the services. If there is no established rate, the federal minimum wage shall be used;

(C) the provider of the service is reporting all monies as income to the appropriate state and federal governmental revenue agencies as required by law;

(D) any amounts due under the contract are paid after the services are rendered;

(E) the agreement is revocable; and

(F) upon the death of the individual, the contract ceases.

Kan. Admin. Regs. § 129-6-109

Authorized by and implementing K.S.A. 2012 Supp. 65-1,254 and 75-7403; effective, T-129-10-31-13, Nov. 1, 2013; effective Feb. 28, 2014.