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Ed Johnson
Ed Johnson, Tax Preparer
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SSD and inheritance

Resolved Question:

I am 53 and have been on SSD since 1998. Last night on Suze Orman a woman called in regarding her brother being able to inherit without loosing his SSD benefit. I will inherit a substantial amount of money to be split 3 ways after my mother's death in the selling of 3 homes she has in a living trust for me, my sis and brother. Suze orman said my Mom would need to get a special addendum or something to the living trust. If I were to inherit about 100-200K or more would my SSD benefits stop?   And what is the name of the document that would need to be drawn up for me to receive that inheritance and still get SSD. I won the award the 1st time applying myself. I have severe rheumatoid arthritis and cannot work as an RN, which is my profession. Thank you. S. Miller
Submitted: 8 years ago.
Category: Tax
Expert:  Ed Johnson replied 8 years ago.

Dear Cambridge,


With only 17 minutes left on your question, let me give you this.


If you set up a TRUST before the inheritance is given, and allow the TRUST to receive the inheritance, it will not be in your name, and thus would not be something that can be touched.


Visit your financial institution, such as your bank or an investment company such as fidelity, and let them know that you want to set up a trust, where you are the custodian of the account. As the custodian, you can draw small amounts of money out as you need it, without it being counted against your SSD.


The money that goes into the trust will not be in your name.


Customer: replied 8 years ago.
Reply to Ed Johnson's Post: This is NOT being understood! My mother has 3 homes in a revocable living trust with my brother, my sis and I as beneficiaries. If she dies, the homes are ours which we will sell and the money will be divided 3 ways. Will this large amount of money affect or STOP my SSD????? Does my Mom need to set up a SPECIAL NEEDS TRUST especially for me so I do not loose my SSD upn receiving the inheritance? Or do I set that up after I get the money from the sale of the houses?
Expert:  Ed Johnson replied 8 years ago.

Dear cambridge,


Thanks for clarifing your questions.


SSD is not a needs based income. There for, receiving the inheritance will not reduce your SSD payments.


However, if you have any other needs based benefits, such as Medicaid, those payments and eligibility may be reduced or eliminated.


Also, if you are receiving and state or VA institutional type care, they may want to attach part or all of the inheritance for reimbursement of care.


Regarding state institutional care and extended care facilities, nurising homes, etc. In some states, they can go back 10 years to attach assetts to help pay for the care. If you anticpate, as a result of your disability, that you may be in one of these type institutions within the next 10 years, it woud be a precautionary measure to place this inheritance ina special needs trust.


The trust needs to be established before you receive the money from the sale of the house.


Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
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Ed Johnson
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GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee