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Benefits and Inheritance

What to do if you receive an inheritance while on SSI, Medicaid, or other benefits.

Built by a former SSA District Manager
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Let's start here

What's your situation?

Pick one that best describes your current situation. We'll guide you step-by-step from there.

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Does inheritance affect SSDI?

SSDI is NOT means-tested. Inheritance does NOT affect SSDI eligibility or benefit amount. Same for Social Security retirement benefits. ONLY SSI and Medicaid are affected by inheritance. If you receive ONLY SSDI, you can inherit freely.

Good news! Inheritance doesn't impact your SSDI benefits.
Insider Tip
Know which benefit you're on. SSDI and SSI are different programs. Check your award letter or my Social Security account if you're unsure.
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How Inheritance Affects Benefits

Learn the rules affecting SSI and Medicaid recipients.

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    SSI

    Inheritance = unearned income in month received, becomes countable resource next month. Resource limit: $2,000 individual, $3,000 couple.

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    Medicaid

    Similar rules, varies by state. CANNOT refuse/disclaim inheritance (treated as transfer). Must report within 10 days. You have until end of NEXT month to spend down.

Insider Tip
You CANNOT refuse an inheritance to protect your benefits. SSA and Medicaid treat a disclaimer the same as receiving it and giving it away — which triggers a transfer penalty.
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Urgent Action Needed

I just inherited money — I'm on SSI/Medicaid

Act quickly but don't panic! Follow these steps to protect your benefits.
1
Report to SSA immediately (call 1-800-772-1213) within 10 days.
2
Report to your state Medicaid agency.
3
Spend down before the end of the following month to stay below the resource limit.
4
Do NOT give money away (transfer penalty up to 36 months SSI, 60 months Medicaid).
5
Consult an attorney about special needs trust or ABLE account.
Insider Tip
You have a window of time to act — the inheritance is income in the month received, then becomes a resource the following month. Use this time wisely.
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Planning Ahead

I expect an inheritance soon

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    Family Conversations

    Talk to family NOW about estate planning.

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    Third-party SNT

    Ask them to set up a third-party SNT in their will.

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    Benefit Documentation

    Document your benefits and resource limits.

Insider Tip
A simple conversation with your family now can prevent a crisis later. Many families don't realize that a well-intentioned inheritance can actually harm their loved one's benefits.
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Common Questions

Frequently Asked Questions

Inheriting property can make you exceed resource limits, which may affect your benefits. Consider consulting a special needs planning attorney for options like a special needs trust.
Inherited retirement accounts can be rolled over or transferred without direct income implications but may affect resource limits. Consult an expert on handling such accounts wisely.
Transferring or disclaiming an inheritance is treated as a transfer and can invoke penalties. Best to accept and address it properly within guidelines.
Keep all receipts and document every expenditure. If necessary, you may need to explain spending to SSA or Medicaid. Filing correctly is crucial.

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Benefits and Inheritance — a free tool from 24help.org
Built by Dr. Ed Weir, former SSA District Manager
Educational resource only. Not legal advice. Always verify with SSA at 1-800-772-1213.