Joint Tenancy and Old Age Assistance in Arizona
Arizona allows its aging residents to apply for a pension under the Old Age Assistance program. They are only eligible for the pension if they meet certain economic requirements. These include a maximum dollar value of an applicant’s home. If an applicant owns a home in joint tenancy, should 100% of the value be included for pension purposes? In Graham v. Allen, 463 P.2d 102 (1970) the Arizona Court of Appeals considered the issue.
Facts and Procedure
Mr. Allen applied for a pension under Arizona’s Old Age Assistance program. To be eligible for a pension, the real estate cannot be valued above $8,000.00. The agency denied his application because he owned a home in joint tenancy with his sister valued at $8,442.00.
The superior court granted review and reversed the agency ruling. The Court of Appeals accepted review.
Mr. Allen argued that the agency should not have attributed 100% of the value of the house to him. He was only a joint tenant and shared ownership with his sister. The Court of Appeals reviewed the laws on a joint tenancy.
Joint tenancy provides a way two or more persons can hold property as if they were one person. The tenants must acquire their interest from the same source, have identical shares, take simultaneously and accept that the possession of each is the possession of all. Each tenant holds an individual whole. If any tenant dies, the remaining survivors hold the totality as before.
Arizona statutes [A.R.S. § 46-252] set out the resources an applicant can own and still receive Old Age Assistance. It sets a maximum value of $8,000 on an applicant’s house. Mr. Allen holds a joint tenant interest in his home. The agency argues that the value for welfare purposes must be the whole value of the house. It claims that the very essence of joint tenancy is its unities.
Since Mr. Allen owns the whole, his interest should be valued on the whole. Mr. Allen argues that the unities of joint tenancy are intended to assure a special form of property ownership. He claims that they do not carry over for other purposes. He points out that a joint tenant can lease his proportionate interest. He can seek contribution from other joint tenants for expenditures made for all. And he is subject to levy and sale upon execution.
Applicant’s Share Is 50% of Value
The Court of Appeals agreed with Mr. Allen. It ruled that the welfare statute was not designed to derogate from the principles of joint tenancy. It was designed to set economic requirements for applicants to receive assistance. For welfare purposes, the evaluation of an applicant’s resources should be practical, not technical. Mr. Allen’s ownership interest is actually only one-half the house’s value. He consequently is not disqualified from receiving Old Age Assistance.
The Court affirmed the decision of the Superior Court.
Contact our experienced Arizona Estate Planning Attorneys at (480)947-4339.
As Seen on CBS News, ABC News, NBC News, and Fox News