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LawTalk
LawTalk, Attorney
Category: Social Security
Satisfied Customers: 35354
Experience:  I have 30 years of legal and litigation experience, including representing clients before the U.S. Social Security Administration.
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Will I lose SSI benefits if I put money I received from the

Customer Question

Will I lose SSI benefits if I put money I received from the sale of a house my siblings and I inherited from our parents in a trust?
Submitted: 9 months ago.
Category: Social Security
Expert:  LawTalk replied 9 months ago.

Good evening,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today. In order to give you a clear and concise answer, I will need some additional information about the circumstances, please.

1. What kind of a trust?

2. Do you mean SSI (the welfare payment), or are you talking about one of the several social security benefits that you paid into through taxes and are now collecting---like Social security retirement, a spouse benefit or a survivor benefit?

3, How much money are we talking about?

4. Is the home in your name---meaning is your name on the deed---or are you just getting cash at one point?

Doug

Customer: replied 9 months ago.
I'm not sure what trust would be best. I'm asking this for my brother who was diagnosed with schizophrenia at age 22 and is now 81. He was on the title of the house we just sold (along with me and my other brother) and now we've been told my sick brother who has been receiving SSI and Social Security may lose these benefits if he cashes his part of the money we made on the house. A disability trust was suggested to us, but I'm not sure if that's the way to go. The amount of money is nearly $28,000. I understand he can invest in a house or a car, but he would prefer to put this money in a trust, IF it won't affect his benefits. There's another complication: $8,333 of this money belongs to our daughter and son-in-law who bought the house from the three of us--the mortgage company wrapped a certain amount of money they(our daughter) wanted into the money we made on the house. We don't dare touch this check that was issued in my sick brother's name until we find out how to deal with this money.
Expert:  LawTalk replied 9 months ago.

Good morning,

Your brother already has a problem. The moment that property was sold and he gained a profit from the sale he lost his eligibility for SSI benefits because he exceeded the asset limitation for SSI. Having the money in a check in his name is ***** ***** from having cash and he cannot just put it into a trust (of any kind) to avoid losing his benefits.

Preparations should have been made for the profit before the sale ever took place. At this point all he can do is notify SSI of the sale, and depending on how long the place has been sold, he may have to repay some SSI benefits back.

You wrote: We don't dare touch this check that was issued in my sick brother's name until we find out how to deal with this money. I'm not sure what you mean----but the check is the property of your brother and he must determine what he will do with it. However, he MUST immediately notify his SSI worker about the sale of the property and his money. Keeping it in check form, and not cashing it, is not protecting him. The money is still there---it belongs to him, and he no longer qualifies for SSI benefits or Medicaid.

If he is getting social security benefits of any kind he will keep those. And once the money he has is spent down below the $200 maximum threshold, he can reapply for SSI. But SSI is for certain people with limited assets and income---and your brother has this money now and is no longer lacking in assets. Therefore he no longer qualifies for SSI. There is no work around and his failure to notify SSI of this money he now has is a violation of his obligations under SSI law and he could be charged with a crime if he does not inform SSI of his money.

A disability trust or a special needs trust won't work because those are trusts that would have to be funded by other people with other people's money. Your brother cannot protect the cash by opening up a trust for himself or for anyone else. He is expected to live off the money until he gets back down below $2000 in assets and then he can re-qualify for SSI.

It simply is too late to do any strategic planning. The cash is already in hand and the idea that not cashing the check is somehow avoiding the issue is a false idea. He might as well have the money in hundred dollar bills. He has lost eligibility and needs to report it to avoid possible demands for SSI repayment and even possibly criminal charges.

I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.

If you have additional questions, you may of course reply back to me and I will be happy to continue to assist you further until your questions have been answered to your satisfaction.

Would you please take a moment to positively rate my service to you based on the understanding of the law I provided by clicking on the rating stars---three stars or more. It is that easy. That is the way I am compensated for having helped you.

Thank you in advance. I wish you the best in your future,

Doug

Customer: replied 9 months ago.
If he loses SSI, does he also lose Social Security and Medicare?
Expert:  LawTalk replied 9 months ago.

Hi,

You asked: If he loses SSI, does he also lose Social Security and Medicare? No, absolutely not. He paid into social security and medicare and those benefits are not dependent on his wealth or income. He will keep both his social security retirement benefit, or spouse benefit, as well as his Medicare benefits. Only SSI and Medicaid will be terminated while his assets exceed the limit allowed.

You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

I hope that I have been able to fully answer your question. Please be so kind as to rate my service to you. That is the only way I am credited for assisting you.

I wish you and yours the best in 2016,

Doug

Expert:  LawTalk replied 9 months ago.

Good afternoon,

Do you have any additional questions that you would like me to address for you? In case you would like a phone call to further discuss these issues you have raised, I will make that offer to you. You are certainly not obligated to accept a call offer, but many people do find it helpful for clarification purposes, as well as to allow them to ask additional questions.

If I have provided you with the information you were seeking, would you please now rate my service to you?

Thanks in advance,

Doug

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