Good news, bad news. The first good: If you are receiving or planning to apply for disability benefits via the Social Security Disability Insurance program — inheriting money or property from a loved one will have no impact on the benefits you receive or how your claim is viewed by the Social Security Administration.
The reason is that to be eligible to apply for SSDI (as opposed to Supplemental Security Income benefits), you not only have to have a medically-documented, “legal” disability that will prevent you from working for at least one year, but you also have to have earned enough work credits. In other words, you have to have paid enough taxes into the system to be eligible.
The SSI disability benefits program, by contrast, is need-based and intended to help disabled adults and children who cannot meet SSDI’s work history requirements. The bad news is that in order to be eligible for SSI benefits, applicants must establish that they have a medically-documented disability that prevents or severely limits their ability to work and must also have limited resources and assets.
In real terms, this means that Oregon residents who are applying for SSI or who are already receiving benefits could lose those benefits upon inheriting money or property.
As things currently stand, SSI recipients are not allowed to have assets worth more than $2,000 (or $3,000, if married). Recipients are also required to report inherited money and property to the SSA no later than 10 days after the last day of the month in which it was received. It is then considered as “income” for that month, and as a “resource/asset” in any subsequent months in which you still have it — which, in turn, can be used to reduce or terminate benefits.
To end this post on a positive note, it is still possible to remain eligible for benefits even if an inheritance is large, so long as estate planning tools such as a “special needs trust” are used to confer the benefits (but not the ownership) of any bequests.
Source: New Philadelphia Times Reporter, “Inheriting assets, money may impact other benefits,” James Contini, July 2, 2012