If you receive federal Supplemental Security Income (SSI) benefits, it is very important that you are able to maintain those benefits so that you can pay for your daily needs.
Receiving an inheritance while getting regular SSI benefits could eliminate your eligibility to continue receiving income from SSI. Losing SSI could be detrimental for those receiving it.
However, there may be a way for your to protect your SSI benefits and still accept an inheritance from a loved one who has passed. Read on to learn more about SSI and inheritance.
An Inheritance Can Impact SSI Benefits
If you are the beneficiary of an inheritance, you are required by federal law to report it to the Social Security Administration, even if you choose not to accept the inheritance. The reason why you must report an inheritance regardless of whether you accept it is because Social Security will consider a rejected inheritance as a transfer of assets and handle it the same way is if you accept it.
If you do choose to accept the inheritance, you must report it to the Social Security Administration within 10 days after the end of the month in which you receive it.
You may face financial penalties if you fail to report an inheritance and you may also have your SSI payments halted for at least six months and up to three years. Even if you don’t accept the inheritance, you may have to pay $25 to $100 for each failure to report or late report.
Since SSI is means-based rather than contribution-based, it is particularly designed to help those with limited income and resources. This means if there are changes to your income or assets, the SSI program may determine that you no longer qualify for benefits.
The SSI Benefit Program is Strict
In order to qualify for SSI, you must own no more than $2,000 in assets, and couples are only allowed $3,000.
Countable resources include your income and available resources, and these are what the Social Security Administration uses to determine whether you are eligible for benefits. Some examples of countable resources include:
- Bank accounts
- Vehicles (excluding one form of transportation)
- Real estate (excluding your home)
- Household goods
- Personal effects
A Special Needs Trust Can Help Protect Your SSI Benefits After Receiving an Inheritance
Luckily, there is a way to protect your SSI benefits and still accept your inheritance. If you deposit your inheritance into a special needs trust, you may continue to receive SSI benefits while also enjoying the advantages of the inheritance.
A trustee must oversee the funds within the special needs trust. This person is typically a parent or another family member of the person with special needs who receives the benefits. It may also be a corporate trustee.
Funds may be placed into the trust by the trustee in order to directly pay for the following:
- Medical costs
- Dental expenses
- Personal care
In addition to an inheritance, a special needs trust may also accept funds from:
- Family members
- Awards from lawsuits
- Life insurance policy proceeds
We’re Here to Help With Your Financial Goals
Here at Legacy Enhancement Trust, all we do is handle finances for people with special needs, so you can be sure we are skilled in helping people with special needs achieve their financial goals.
We have helped many others with their monetary needs and we want to do the same for you. Don’t hesitate to reach out to our team right away to learn more about what we can do to help you with your financial future.
Call Legacy Enhancement Trust today at (888) 988-5503 to learn how we may assist you!