Caution urged in willing property to SSI recipients

Special considerations are often required when turning over property or other estate assets to adult children who are receiving SSI or disability payments. It is important to recognize the financial consequences that large gifts may have upon individuals who receive government living subsidies, and family members would be wise to consider the legal implications as well.

Transfer of property can affect an individual’s eligibility for these federal programs altogether, according to Social Security experts. State-sponsored programs may also be affected. SSI is a need-based program that provides monthly cash benefits for disabled people of all ages, and eligibility is determined through analysis of both individual resources and income.

In general, an individual should not have more than $2,000 in resources to remain eligible for the program. That number jumps to $3,000 for couples. That amount does not consider the value of the house in which the individual lives.

So, if you decide to transfer a property deed from yourself to a person receiving SSI, it is best to guarantee that the recipient will actually be living in the home. Otherwise, that property is considered a resource and results in removal of eligibility status for the SSI program.

A better option can be to transfer property holdings to a special needs trust that will allow the individual to receive supplemental money to add to their monthly government stipend. For example, if the property can be sold or rented, that money could be placed into a trust and used as needed. The trust would be administered by a third party, and so it would not count against SSI eligibility, according to legal experts.

Before making major decisions regarding property and asset transfer to SSI recipients, many legal professionals recommend discussing these changes with a qualified attorney. Furthermore, contacting the Social Security Administration directly may provide detailed and helpful answers related to estate planning and SSI eligibility.

Source: The Star-Ledger, “Biz brain: Deed to out-of-state house could be troublesome inheritance,” Karin Price Mueller, June 19, 2012

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