Supplemental Security Income (SSI) is a means-tested program for the disabled and the elderly. SSI will consider an individual’s assets and income in determining whether the person qualifies for benefits, and if so, for how much. For SSI purposes income is something (such as cash or other property readily convertible to cash) that can be used to purchase food, shelter or clothing.
SSI uses state law to determine when an inheritance becomes income for SSI purposes. Inherited cash or other non-cash property is considered income when the heir has the legal right to spend the cash or sell the property to convert it into cash.
Some states do not allow an heir to spend an inheritance before the estate is closed. In other states, an heir can receive a contingency interest in property at the time of the decedent’s death. The beneficiary can sell the contingency interest before the estate is closed. However, such a contingency interest may be very difficult to value. If it can be valued, then it will be considered income.
The SSI program will follow state law in determining when an inheritance becomes income. This will include when property can be converted to cash before final distribution. See Social Security Ruling (SSR) 97-1p.
This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.