SI KC00830.550 Inheritances

See SI 00830.550

A. State Law For Iowa, Kansas, Missouri, And Nebraska

The state laws of Iowa, Kansas, Missouri, and Nebraska indicate that at the time of an individual's death an inheritance is received and has value to the heir. This is not dependant on the probating of the will and the completion of probate is not required. This is also true if the individual died intestate (having made no legal will).

The executor, estate administrator, or personal representative of the estate may take possession or control of the estate property until the completion of probate at which time the assets are distributed. Before distribution the heir has equitable ownership of the inheritance. Equitable ownership exists with out legal title to property and is discussed in SI 01110.500B.3.b, SI 01110.515A.2.b & C.1. All four states allow an heir to sell, convey, or encumber this equitable interest in the inheritance for personal gain, even while the property is held in probate. Therefore, it can be considered a resource for SSI purposes.

EXCEPTION:

If the terms of a will are being contested the inheritance is not considered received by the person named in the will. Under the laws of Iowa, Kansas, Missouri and Nebraska if a will is being contested, a person can not sell or convey his possible ownership interest until such contest is decided by the probate court.

NOTE: A will is not contested merely because a lien holder or creditor files a claim against the estate.

All four states allow heirs to disclaim any or all interest in will personal or real property. The act of disclaiming must be made in writing. To ensure that the disclaimer has been effected contact the probate court.

B. Valuation Of An Inheritance

Determine the value of an inheritance by applying the appropriate instructions in SI 00810.020, SI 00830.550, SI 00835.020B.6, SI 00835.310C & .310E, SI 01110.400, SI 01120.215 and SI 01140ff depending on what the inheritance is e.g. real property. Additional consideration may then be given to property that is part of an unprobated estate.

State law allows the heir to sell the ownership interest, but prior to probate the value of that interest may be effected. This is because until the real estate is released from the custody of the law, it may be sold under order of the probate court to satisfy the obligations of the estate. The value may depend on whether the estate has little or no debt, is heavily indebted, or the indebtedness is unknown.

Prior to probate the heir has only an equitable ownership and if there are other heirs it is an undivided fractional interest in the whole property. While an undivided interest can be sold or disposed of without the permission of the other owners, this type of ownership may impact the value.

To determine a value less than what would be established using the general procedures in the references shown in the first paragraph of section B, there must be supporting evidence.

Examples of evidence that would support a reduced value:

  1. Verification from the probate court that the estate has debts of a specific amount.

  2. A knowledgeable source states that the value of the property is reduced to a specific amount because the estate debts are unknown, or the ownership interest is undivided and there are other heirs.

Once the probate is completed the value of the property would be established under regular procedures in SI 00810ff and SI 01110ff.


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http://policy.ssa.gov/poms.nsf/lnx/0500830550KC
SI KC00830.550 - Inheritances - 01/17/2002
Batch run: 01/27/2009
Rev:01/17/2002