What Happens If I Receive an Inheritance on SSI?
If you have been approved for Social Security disability, you know that continuing to receive benefits means you must remain eligible under strict rules established by the Social Security Administration (SSA). For individuals who rely on Supplemental Security Income (SSI), the medical requirement is that you have a disabling condition that prevents you from working and is expected to last at least a year. SSI is a needs-based program, so you must also meet the financial criteria. Your assets and income must fall below a threshold set by SSA, minus certain items that are specifically excluded.
As such, there are questions about what happens when an SSI recipient inherits money, assets, or both. The ceiling set by SSA is somewhat low, and a sizable sum could put a person above the permissible net worth. It is important to understand how the laws work, since advance planning could help avoid a problematic result. You should rely on a Maryland Social Security disability lawyer for guidance, but a few points are important.
Inheritance Puts SSI at Risk: SSA reviews both assets and income to assess eligibility for SSI, and the threshold for both fluctuates. In 2023:
- The asset limit for an individual is $2,000 and $3,000 for a married couple. Your home, vehicle, and certain household effects and personal belongings are excluded.
- Income limits for SSI are $1,913 for an individual and $2,827 for spouses.
Any inheritance that would take your assets or income above these amounts could disqualify you from receiving SSI. If it is sizable, your inheritance may be sufficient support for many years or your lifetime. However, you may go through it quickly when it is your sole resource after losing SSI.
Reporting to SSA: It is a mistake to not inform SSA about receiving an inheritance, and authorities crack down on those who defraud Social Security disability programs. In most cases, you must report your receipt of an inheritance to SSA within 10 days of the following month. From there, SSA will evaluate your eligibility and notify you if SSI terminates.
Options to Keep SSI: Use of trusts is the most effective way to ensure you remain eligible for SSI, even after receiving an inheritance. There are two options that you might employ:
- A first-party special needs trust is created by the disabled individual, a parent, or guardian. By depositing the inheritance into the trust and meeting strict requirements, you can avoid having SSA count the amount toward SSI eligibility.
- A third-party special needs trust is created by a loved one, the person who wants to provide the disabled person with an inheritance. Instead of giving it outright, the amount goes into a trust and does not affect SSI.
Discuss Options with a Maryland SSI Attorney
For more information about inheritances and how they affect SSI eligibility, please contact the Law Offices of Steinhardt, Siskind and Lieberman, LLC. We can schedule a no-cost consultation at our offices in Glen Burnie, Owings Mills, Ellicott City, or Annapolis. After reviewing your circumstances, we can advise you on special needs trusts and other options.