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How an Inheritance Affects SSI Benefits

In Florida, as in various other jurisdictions, if you are a recipient of Supplemental Security Income (SSI) benefits, then your benefits may be substantially affected in the event that you receive an inheritance.  Depending on the amount that you inherit (and the structure in which the inheritance is setup), you may be disqualified from receiving benefits, or may otherwise be penalized.

If you wish to continue to receive benefits — and avoid suffering any unpleasant and unnecessary interruption of your SSI benefits — then it’s important that you understand the various options at your disposal, and what limitations you may be saddled with.

Disclaiming Your Inheritance Will Not Work

Many recipients of SSI benefits do not realize that simply disclaiming the inheritance (and allowing it to go to another beneficiary, or back to the estate) will not necessarily lead to a resolution.  By disclaiming the inheritance, you may be subjected to a penalty period of up to three or more years, during which you will not receive benefits.

You Must Report the Inheritance

It’s important that you maintain a transparent relationship with authorities — unfortunately, it can be difficult for many clients to understand where the boundary of privacy and legal violation is drawn.  Failure to report the inheritance (or your intent to disclaim the inheritance) is a violation of various state and federal laws, and may result in criminal and civil penalties.  To ensure that you are making the requisite disclosures (without undermining your position), make sure to consult with an SSI lawyer to guide you through the process.

The Special Needs Trust Option

If the deceased left the funds in a long-term payment structure where it does not inflate your assets to the degree that you lose out on SSI benefits, then you should be fine.  Similarly, if the deceased knew about your SSI benefits and setup your inheritance in a special needs trust, then your benefits should be preserved.

What if there is no such structure in place, however?

In Florida, the self-settled or “first-party” special needs trust allows you — the SSI benefits recipient and inheritance beneficiary — to transfer your inheritance assets to a special needs trust that will pay out to you.  The assets will therefore be available to you (though with certain limitations), and you will not lose out on your SSI benefits.  It’s worth noting that the funds may only be used for your health, education, and welfare, though this includes a broad range of support costs, such as rent and even motor vehicle expenses, as well as electronics (that contribute to health, welfare, and education).  Special needs trusts have a reasonable degree of flexibility.

Contact an Experienced Disability Benefits Attorney Today

Have you received substantial assets through an unexpected inheritance?  Inheritance can interfere with your continued receipt of SSI benefits, but in Florida, beneficiaries have various options for avoiding this financial conflict.  To ensure that your benefits are protected, however, you’ll want to consult with a disability attorney who has a successful track record in helping SSI recipients secure their assets without disqualification.

Call (813) 264-5363 today to schedule a free consultation with an experienced Tampa SSI lawyer here at Mike Murburg, P.A.