PS 01510.017 Indiana
A. PS 07-119 SSI - Indiana - Review of the Inheritance of Gail J~, Parent Deemor for Jacque J~, ~ Your Reference: S2D5G6 SI-2-1-IN (J~)
DATE: April 25, 2007
The issue is whether a parent's inheritance in an estate should be treated as a resource or income for the purpose of determining a child's SSI eligibility in the state of Indiana. All states in Region V consider an inheritance as income as of the date of death and a resource in subsequent months.
The mother of an SSI child was one of the heirs to the Decedent's estate, and had an inheritance interest in the property (condo) of the estate and title in Decedent's property. The mother's share of the interest in the condo is income up to the presumed maximum value in the month of Decedent's death, and an excludable resource in the following months, since it served as the principal residence for herself and SSI child prior to the decedent's death.
You asked when Gail J~'s interest in an inheritance in an estate should be treated as a resource or income for the purpose of determining SSI eligibility for her son, Jacque G. J~. We have reviewed the account documents and, for the following reasons, we conclude that Ms. J~'s inheritance interest should be treated as income on the date of Shirley W~' death and a resource beginning the following month.
Gail J~ became one of four heirs to the estate of Shirley W~ ("Decedent") after her death, on August 31, 2006. On September 14, 2006, the Decedent's Last Will and Testament was probated and an estate was established. On that same date, Ms. J~, along with the three other heirs, created a "Family Settlement Agreement" ("Agreement"). Ms. J~ was appointed as a co-executor of the estate. The Agreement set forth terms on the distribution of some of the estate assets. The relevant terms of the Agreement stated that the following assets would be contributed to the proceeds of the Decedent's estate: a Certificate of Deposit in the amount of $35,480.62, minus $16,500.00, and a checking account in the amount of $35,877.68. Other assets in the Decedent's estate are a condominium; two transfers from checking accounts in the amount of $413.00 and $554.42; a life insurance policy in the amount of $4,000; an automobile; and furniture. Prior to the Decedent's death, Ms. J~ and Jacque moved into the condominium, and it is currently being used as their principal residence. The estate is currently in probate and has not yet been settled or closed.
Under SSA's Program Operations Manual System (POMS), inheritance is an interest in a decedent's estate either under a will or under the laws of intestacy. POMS SI CHI 00830.550. In all states in Region V, an inheritance constitutes income as of the date of death, and a resource in subsequent months. See POMS SI CHI 00830.550(F); Memorandum from Reg'l Chief Counsel, Chicago, to Assistant Reg'l Comm'r-MOS, Chicago, Regional Supplement on When Inheritance Property Becomes Income (Mar. 4, 2003, Update Mar. 13, 2007).
Under Indiana law, title to the real and personal property vests immediately with the heirs, but is subject to possession of the personal representative, who is responsible for paying expenses and administering the estate. See Ind. Code Ann. § 29-1-7-23 ("[w]hen a person dies, his real and personal property, passes to persons to whom it is devised by his last will, or, in the absence of such disposition, to the persons who succeeded to his estate as his heirs; but it shall be subject to the possession of the personal representative and to the election of the surviving spouse and shall be chargeable with the expenses of administrating the estate, the payment of other claims . . .").
In Indiana, as an heir, Ms. J~'s interest is transferable prior to final settlement of the estate, since the law provides that, although the final decree in probate is the final adjudication of the transfer of the property to distributees, "no transfer before or after the decedent's death by an heir or devisee shall affect the decree, nor shall the decree affect any rights so acquired by grantees from the heirs or devisees." Ind. Code Ann. § 29-1-17-2(d); see also Helvey v. O'Neill, 288 N.E.2d 553, 557 (Ind. Ct. App. 1972) (sale of real property by heir prior to final settlement of estate passed title and right of possession to purchaser); Boice v. Mallers, 96 N.E.2d 342, 345 (Ind. Ct. App. 1950) (trustee effectively passed title to stock by transferring it prior to settlement of the estate).
As such, on August 31, 2006, when Ms. J~ became one of four heirs to the Decedent's estate, she had an interest in the property of the estate and title in Decedent's property vested immediately in Ms. J~. The amount of income would be determined by the market value of her right to inherit as of the date of Decedent's death. See POMS SI CHI 00830.550(F). Although Ms. J~ had an inheritance interest in the condominium, it is being used as the principal residence for Ms. J~ and Jacque. Therefore, her share of the interest in the condominium constitutes income up to the presumed maximum value rule in the month of Decedent's death. POMS SI 00830.550 (A)(4). However, in the following months it would be excluded as a resource. See 20 C.F.R. § 416.1212.
In sum, we conclude that Ms. J~'s inheritance was income as of the date of Decedent's death and a resource beginning the following month.