It is not uncommon for an individual who is receiving disability benefits to inherit property, including a house, if a parent or other relative dies. When this occurs, the obvious question is, “how will inheriting a home impact my disability payments?” The answer depends on the type of benefits you are currently receiving. In some cases, it is not an issue, while in others, a person could lose their benefits. Ken Kieklak, an experienced Fayetteville Social Security Disability attorney, will review the implications of inheriting a house in the following article.
Inheriting a House While Receiving Social Security Disability Insurance (SSDI) Benefits
The Social Security Administration (SSA) oversees two programs that provide monthly benefits to individuals with physical or mental impairments that impact their ability to earn a living. While both of these programs offer individuals suffering from a disability financial assistance, they each approach a person’s assets in a different manner.
SSDI is a program designed for disabled workers. It serves as a safety net for those individuals who have been working but suffer a disability before they reach retirement age. A person’s eligibility is based on their work history and the number of work credits they have earned over the years. Typically, an individual must earn 40 credits to qualify for benefits. When you apply for SSDI, the SSA will not consider your personal property or other assets, including your home or any inherited property, in determining if you are eligible for benefits.
Therefore, as long as you are not earning above the monthly Social Security income limit of $1,276, as of 2021, your assets should not impact your eligibility to receive benefits. People on SSDI can have a home as a residence and a vacation home. If you inherit an additional property, your benefits should not be impacted. However, if the property is used as a rental property and generates monthly income above the limit, your benefits could be jeopardized. Before making any decisions concerning an inherited house, you should speak with an experienced Arkansas disability attorney.
Inheriting a Home While Receiving Supplemental Security Income (SSI) Benefits
Not every disabled individual has earned enough work credits to be eligible for SSDI benefits. The SSA also offers another disability program, SSI, that is designed for disabled adults, disabled children, blind individuals, and people over the age of 65. However, unlike SSDI, SSI is intended for individuals with limited work histories, income, and resources. SSI is a need-based program. Therefore, the SSA will consider your assets, property, and resources when determining eligibility.
When an individual applies for SSI, they must meet a financial resources threshold. Under the current law, to qualify for SSI, your resources and assets must not exceed $2,000 if you are an individual or $3,000 if you are applying as part of a couple.
Then the question is, “what are resources according to the SSA?” Resources include just about all your property, such as cash, bank accounts, life insurance policies, vehicles, and anything else that could be converted to cash, food, or shelter. However, there are some exclusions available, including your home. According to the SSA, your home is exempt from this eligibility requirement if it serves as your primary residence and it does not generate income.
If you inherit a home, whether or not it will impact your SSI benefits depends on your particular circumstances. For example, if you were living in your parents’ house and they leave it to you in their will, then you could likely continue to live there without losing your SSI benefits. In cases where an individual was renting or did not own a home that they lived in, inheriting a house might not impact their monthly benefits.
However, if you already own a home and inherited an additional property, your benefits could be negatively affected. The additional house will be considered a resource and it will not be excluded under the SSA’s determination of resources. In this case, the inheritance could cost you your monthly benefits.
There are steps you could take to mitigate the legal issues associated with inheriting a home while receiving benefits. It is crucial to speak with our Harris, AR Social Security Disability attorney if you believe you will likely receive an inheritance while on SSI.
Protecting SSI Benefits If You Inherit a House
There are some ways to protect your benefits if you were to inherit a home or any other valuable property. The first thing to do is discuss the matter with an experienced Sebastian County disability attorney and your potential benefactor.
One option is to put the home and any other property into a special needs trust. By creating a trust, you will only have access to funds from the trust for specific needs, such as food, shelter, medical care, and education. A trustee would administer the assets and you would not have control or possession of any of the property, including the home. This arrangement will allow you to benefit from the inheritance without affecting your SSI benefits.
Call Our Arkansas Social Security Disability Attorney if You Have Inherited a Home
One way wealth is passed down in this country is by leaving family members or loved one’s property, such as a house, when you die. If you are receiving Social Security Disability benefits, inheriting a house could be a significant issue. The effect of inheriting a home will depend on whether you are receiving SSDI or SSI benefits. Ken Kieklak, Attorney at Law, will be able to help you understand the impact of inheriting a home or other property. If you have questions regarding an inheritance, contact our Arkansas Social Security Disability attorney at (479) 316-0438. Our consultations are free and confidential.
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