For many individuals receiving SSI (Supplemental Security Income), the question of whether they can inherit a home while still receiving benefits is a serious concern. SSI is a government-funded program that provides financial assistance to individuals with disabilities, low income, and limited resources. The program is designed to ensure their basic needs are met, including housing, food, and medical care.
Of course, someone’s objective financial position often changes dramatically when they inherit a home, even if their monthly income does not. For this reason, many worry that inheriting a home will jeopardize their eligibility for benefits. Below, we’ll discuss whether or not is it possible to inherit a home while receiving SSI, the rules and regulations surrounding the program, and what you should consider before making any decisions.
Inheritance of any kind is considered a “change in resources.” This is because SSI is a needs-based program, and so any significant change to your financial situation will result in a change in your resources.
However, housing is not considered a countable resource when it comes to calculating whether or not you are eligible for SSI. The resources you can have that are not countable resources include:
- Your home
- Your vehicle
- Household goods and personal property
- Any burial plans (up to $1,500)
- Other assets like life insurance (up to $1,500)
That means that any inheritance you get besides the home itself will be a countable resource, and so may or will affect your SSI eligibility. (In other words, if you solely inherit a home you plan to live in, SSI eligibility should not change.)
The rules surrounding SSI and inheritance can be complex and depends on a variety of factors, such as your living situation, what you plan to do with the property and the value of the home. If you’re inheriting a home and plan to move into it, it’s likely that the SSA will allow you to do so without making any significant changes to your eligibility, since your means (how much money you have to spend on your housing, food, and medical expenses) have not changed.
If you plan to rent the home out for a significant amount of monthly income for you (after expenses) or if you plan to sell it, inheriting the home is much more likely to impact your SSI benefits.
Regardless of whether you plan to move into the home or sell it, you will need to tell the SSA about your change in circumstances. If you fail to do so within 10 days of your circumstances you may be penalized or even lose your benefits.
Yes, it is possible to refuse an inheritance in order to maintain eligibility for SSI benefits. If an SSI recipient inherits resources that would cause their total resources to exceed the SSI asset limit, they can refuse the inheritance to keep their SSI benefits.
If you are considering this, you need to think seriously about whether or not it is the right decision for you. In most cases, the financial benefits of the inheritance will outweigh the benefits of keeping your SSI. The only time when this may be untrue is if the inheritance is small enough to make it inconvenient to come off and back onto SSI in the space of just a few months.
If you are unsure, it’s best to speak to a financial advisor or attorney to get more advice on the possible ramifications of each decision.
There are generally only two ways to inherit a home while on SSI and not use it as your primary residence but retain ownership of it. One is if the home cannot be sold due to joint ownership, and the other is if it is placed in a special needs trust.
The former can happen if, for example, you and your sibling jointly inherited the family home and you agree to continue owning your share but allow your sibling to live in it. In this circumstance, the SSA would not force your sibling to move out so you can access the cash to live off.
A special needs trust, which is a type of irrevocable trust, is the only other way to continue “owning” a home while on SSI without calling it your primary residence. A special needs trust is a first-party trust, which means that a disabled person can set it up for themselves.
Other forms of irrevocable trusts (such as a third-party special needs trust) must be set up by someone else for your benefit. These need to be funded before the person who set them up passes away, so this is only an option if you are planning ahead for your beneficiary.
While your SSI benefits help you feel secure, inheriting assets of significant value can give you time to have a better quality of living. With some careful planning, your windfall could provide you with a secure monthly income for years to come – one in which you won’t be under scrutiny by the SSA and you’ll be able to save and spend money with more independence.
We know selling an inherited home is a daunting prospect for those who decide to sell their inherited home instead of using it as their primary residence. Fortunately, we’ve got plenty of resources you can use to educate yourself on everything you need to know about selling the home. Use the links below to learn more about selling an inherited home: