How To Maintain SSI Benefits When Receiving An Inheritance
Many people are excited to receive an inheritance. Even a small inheritance can help people better manage their daily expenses, while a larger inheritance can be life-changing for many people. Unfortunately, inheritances sometimes change people’s lives in a negative way. For people who are receiving government benefits, this is particularly true, especially when those benefits are income-based, such as Supplemental Security Income (SSI). Below, our St. Petersburg trust planning lawyer explains what you need to know.
What is Supplemental Security Income (SSI)?
SSI is a federal benefit plan overseen by the Social Security Administration (SSA). SSI benefits are meant to provide financial support to people in need. If you are 65 years of age or older, have special needs or are blind, and you are a citizen of the United States or a legal resident, you may be eligible for SSI if you have limited income and financial capacity.
How Does an Inheritance Affect SSI Eligibility
The SSI program is strictly income-based and certain regulations regarding assets also apply. One of the most important rules for those receiving SSI benefits is that beneficiaries cannot have calculable resources valued at more than $2,000. Due to the fact that SSI is only available to those with financial need, both earned and unearned income can impact benefits. Wages and salary provided by employment are earned income. An inheritance is not necessarily earned, but it is still considered income according to the SSA.
Due to the fact that an inheritance can negatively impact the amount of SSI benefits one receives, some people are tempted to reject the inheritance when it is offered to them. This is a mistake. If you deny an inheritance to protect your SSI benefits, you could actually end up losing both.
How to Protect Your SSI Benefits when Receiving an Inheritance
If you are currently receiving SSI benefits and you also expect to receive an inheritance, there is no need to reject it. Depending on your circumstances, you may have options. If you are under the age of 65 and suffer from a disability, you can transfer the inheritance into a trust. The best types of trusts in this scenario is a pooled trust or a special needs trust. Placing assets in these trusts means the inheritance actually belongs to the trust and not you, so they will not count when SSA is determining whether you are eligible.
In other instances, you may choose to transfer the funds to a relative for a certain period of time. While this may result in losing your SSI benefits temporarily, you may become eligible again in the future.
Our Trust Planning Attorneys in St. Petersburg Can Recommend Next Steps
If you are receiving SSI benefits and you expect to also receive an inheritance, there are steps you can take to protect both. At Legacy Protection Lawyers, our St. Petersburg trust planning attorneys can outline the options available and help you make the best decision for you moving forward. Call us now at 727-471-5868 or contact us online to schedule a consultation.