5430 Exempt Personal Property - The resource value of the following classifications of personal property shall be exempt. However, if such property is transferred to a trust, it loses its exempt status as the trust becomes the legal owner of the property.

 

"See Policy Memo #02-10-02 re: "Prearranged funeral and burial agreements and excess funeral funds".

 

  1. Burial Funds - 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 which are separately identifiable and clearly designated as set aside for each member's burial expenses are exempt.

    Burial funds are defined as revocable burial contracts and trusts as well as other revocable burial arrangements. They also can include cash, financial accounts (e.g., savings or checking accounts), or other financial instruments with a definite cash value (e.g., stocks, bonds, C.D.'s, cash surrender value of life insurance policies, etc.). Such instruments do, however, need to meet the "separately identifiable and clearly designated" criteria below.

    A 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 such as a prepaid contract fund for burial merchandise as described in item (2) below. It shall meet the "clearly designated" requirement 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. Failure to meet either of these conditions shall result in the fund not being excluded under this provision. If the fund is exempted and the client withdraws all or a portion of the funds, the amount withdrawn shall be considered as a nonexempt resource and, if transferred, subject to provisions of 5700.

    This provision is not applicable to any irrevocable funeral agreements (e.g., $7,000 agreement established per K.S.A. 16-303) as such agreements are already exempt due to their legal unavailability per item (8) below. However, the $1,500 amount which can be exempted under this provision must be reduced by the amount of any such irrevocable agreements except to the extent that it represents excludable burial spaces (see item 2), as well as the face value of all life insurance policies.

  2. Burial Spaces - Burial spaces are totally exempt for each member of the assistance plan. Burial spaces are defined as conventional grave sites, crypts, mausoleums, caskets, urns, and other repositories which are traditionally used for the remains of deceased persons. Vaults, headstones, and grave markers would also be included in this definition as well as monies set aside for opening and closing the grave. Burial spaces purchased through a revocable or irrevocable prepaid contract would be exempt under this provision including the account in which the funds are deposited under the contract and the interest that accrues on such funds.

  3. Cash Assets - Cash assets which may be traced to income exempted as income and a resource per 6410 (applicable subsections) are exempted.

  4. Commingled Funds (Food Assistance Only) - Exempted monies that are kept in a separate account, and that are not commingled in an account with other nonexempt funds, shall retain their resource exemption for an unlimited period of time. The resources of students and self-employed households which are exempted as provided in 5430 (7) and 6410 and are commingled in an account with nonexempt funds shall retain their exemption for the period of time over which they have been prorated as income or in the case of students, for the period of time they are intended to cover. All other exempt monies which are commingled in an account with nonexempt funds shall retain their exemption for 6 months from the date they are commingled. After 6 months from the date of commingling, all funds in the commingled account shall be counted as a resource.

  5. Contract Sales, Promissory Notes and Loans - A contract sale, promissory note, loan or other agreement to repay a debt is exempt only if the proceeds are considered as income and the income is consistent with the repayment terms and conditions set forth in the written contract.

    If the debtor is not meeting the terms and conditions of the contract, the debt is considered a potential resource and the individual is required to pursue recovery per 2124.1.

  6. Escrow Accounts - For all programs, escrow accounts established for families participating in the Family Self-Sufficiency Program through the Department of Housing and Urban Development. Interest earned on such accounts shall also be exempted as income.

  1. Essential for Employment - Property which is essential to the employment or self-employment of the individual is exempt. This would include property such as tools of a tradesman, farm machinery, livestock, stock and inventory of self-employed person that are reasonable and necessary in the production of goods or services, vehicles, business checking account, or other business property where the person is still actively involved as a manager. Income from such property would usually be considered as earned income.

    If the property is not in current use, it may be exempted under this provision as long as the individual expects to resume its use within 1 year of the date of last use. This period can be extended an additional year if the individual has a disabling condition which prevents him or her from resuming the activity within the first year. Documentation is required. If the individual does not expect to resume use of the property, it shall be counted in full.
    Property essential to the self-employment of a household member engaged in farming shall continue to be excluded for one year from the date the household member terminates the self-employment farming.
     

  2. Funeral Agreements - The value of all funeral arrangements.

  3. Home Consumption Items - Items for home consumption. These items consist of produce from a small garden, a small flock of chickens or other fowl, a cow, a pig, or other animals used to meet the food requirements of the family.

  4. Home Sale Proceeds - The proceeds from the sale of a home are exempt if the proceeds are conserved for the purchase of a new home and the conserved funds are expended or committed to be expended within 3 months of the sale. Any of the proceeds so conserved that are used for any other purpose shall be considered under the transfer of property provisions for persons in institutional or HCBS living arrangement. See 5720.

  5. Household Goods - Household equipment and furnishings in use or only temporarily not in use. These consist of such items as dishes, tableware, cooking utensils, canning equipment, bedding, and household linens, beds, mattresses, stoves, and refrigerators.

  6. Income Producing Property - Property (other than cash assets), which produces income consistent with its fair market value is exempt in full, even if used only on a seasonal basis. This would include property such as vehicles, farm equipment or business inventory which are rented or part of an ongoing business where the individual is no longer actively involved in the management of the business. Inventory also includes livestock or grain in storage which are sold on a regular basis as the market permits. Generally income from such property would be considered unearned income. See 6313 (1) regarding self-employment income.

    When it is necessary to determine if the property is producing income consistent with its fair market value, local realtors, tax assessors, the Small Business Administration, or other similar sources may be contacted to determine the prevailing rate of return (e.g., square foot, rental, etc.) for similar usage of the property is the area. If it is determined that the property is not producing income consistent with its fair market value (for instances, the property is being leased for a token payment), such property would be counted as a resource. However, if the property was leased for a return that was comparable to other property in the area leased for similar purposes, it would be considered as producing income consistent with its fair market value and would not be considered a resource.

    If the property is not in current use, it may be exempted under this provision as long as the individual expects its use to resume within 1 year of the date of last use. If the individual does not expect use of the property to resume, the property shall be counted in full.

  7. Individual Development Accounts (IDAs) - IDAs which meet the guidelines specified in 6410.

  8. Insurance - For all programs the cash value of life insurance policies is exempt.

  9. Kansas Investments Developing Scholars (K.I.D.S.) Match Grant Program - K.I.D.S. is a form of a Learning Quest 529 account available to a limited number of participants with earnings below 200% of the poverty level. A Participant Account and a Match Account are established through Learning Quest. The amount in both the Participant Account and in the Match Account are exempt as resources. Refer to 6410 Educational Income.

  10. Learning Quest /Coverdell Education Savings Account/ and Other 529 Educational Savings Plans - These plans are exempt for all programs.


  11. Pension Plans - Pensions plans shall be considered as follows:
     

    1. Food Assistance and Child Care -The cash value of pension plans or funds, including 401 (k) plans, IRAs, and Keough plans are exempt. All retirement plans are exempt for food assistance and child care purposes. See a list of excluded retirement plans in the Appendix, item T-12.


    2. Cash Programs - The cash value of pension plans or funds are exempt.
       

      Exceptions: Keough plans that involve no contractual relationship with individuals who are not household members, individual retirement accounts (IRA's) and 401(k) plans are not exempt. In addition, if an individual is retired or claiming disability and not drawing benefits to which they are entitled, the cash value of the pension plan or fund is not exempt.

      NOTE: Loans taken against 401(k) plans are treated in accordance with 6410.

  12. Personal Effects - Personal effects and keepsakes are exempt. Personal effects are items such as a watch, clothing, books, comb and brush. Personal keepsakes are items such as gifts kept for the sake of the giver, items with sentimental value, and the like. Family pets are also exempt under this provision.

  13. TANF/SSI Recipients - For food assistance, the resources of any household member who receives TANF or SSI benefits shall be exempted for purposes of the Food Assistance Program. This includes resources jointly owned by recipients who receive TANF or SSI with those who do not.

    Persons are considered recipients if their TANF or SSI benefits are recouped to the point that no actual payment is made. Persons are also considered recipients if their TANF is suspended for one month due to excess income per 1512.5. For households in which all members receive TANF or SSI, refer to 2510 for a description of the categorical eligibility provisions.

  14. Tools - Tools in use. Tools consist of such items as hammers, saws, wrenches, planes, pliers, hoes, rakes, and similar articles necessary for the maintenance of house, garden, or yard.

  15. Vehicles - See 5500 and subsections.