SI CHI00830.550 When Inheritance Property Becomes Income

A. Policy

State law must be taken into account in all cases involving an inheritance. Field offices are allowed to assume, absent regional instructions to the contrary, that an inheritance is received when the estate is closed (or earlier, if the individual alleges receiving it earlier). POMS further requires taking into account state law that would produce a different result than the assumption would produce. Since the Social Security Act was silent on this issue and SSA's policy is not set forth in regulations or rulings, we are issuing a six-state synopsis concerning when inheritance property becomes income.

B. Unearned Income Defined

Unearned income is all income that is not earned.

C. Inheritance

An interest in a decedent's estate either under a will or under the laws of intestacy.

D. Heir

An individual entitled to either real or personal property under a will or under the laws of intestacy.

E. Ownership Interest

An individual is deemed to have an ownership in an unprobated estate if:

  • documents (e.g., a will or court records) indicate an individual is an heir to property of a deceased; or

  • an individual has use of a deceased's property or receives income from it; or

  • an individual who is related to the decedent is entitled to a share of the property under the state intestacy laws; and

  • the inheritance, use of income, and distributions are uncontested.

The interest in an unprobated estate is not a resource until the month following the month in which it meets the definition of income.

F. State Law

In all six states in Region V (Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin), an individual has some alienable property interest, whether it is an interest in the actual property inherited or a beneficial interest in the estate, as of the decedent's death. This interest would constitute income as of the date of death, and a resource in subsequent months.

Determining the market value of an individual's interest in an estate prior to settlement of the estate may be difficult since the property may be sold or the interest in the estate may be expanded to cover the expenses and obligations of the estate. If the estate has little or no debt, the heir's interest may be fairly easily determinable at the date of death. But if the estate is heavily indebted or the amount of indebtedness is unknown, the heir's interest may be so speculative as to render it without any fair market value.

A contested will or dispute over heirship also would affect the value of an individual's interest in the estate and may make it prohibitively difficult to determine the value of the inheritance, and the case should be referred to MOS-CRSI/SSI, as noted below.

If the individual has attempted to disclaim or renounce their interest, or a portion of that interest, or if there are any other unresolved issues that prevent you from determining the income or resource status of an inheritance, refer the document with any relevant information or statements for an opinion through MOS-CRSI/SSI to the Regional Attorney's Office.

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SI CHI00830.550 - When Inheritance Property Becomes Income - 10/05/2022
Batch run: 10/05/2022