You requested a legal opinion reviewing Kansas state law on inheritances. Specifically,
you sought an explanation as to when title to personal property passes to an heir
when an estate is in probate so as to determine eligibility for SSI benefits and if
any statutory or common law changes had taken place since 1994 if this response was
contrary to earlier advice. You asked for a review of the state laws in Iowa, Missouri,
and Nebraska in regard to when title to real and personal property passes to an heir.
You further asked if crops could be added to the list of examples of personal property
in Kansas. Below is our response to the specific issues raised.
Your request was occasioned by a letter from an attorney who represented an SSI recipient.
The recipient's benefits had been withheld when it was learned that she was the beneficiary
of her mother's estate, the proceeds of which were later placed in a special needs
trust in the interest of the recipient. In his letter, the attorney stated that the
Agency's action denying benefits was in error because the SSI recipient did not have
a possessory interest in the personal property of her mother's estate before such
estate was probated. The attorney stated that Kansas law holds that the personal representative
takes title to personal property of the estate of a deceased person. He also stated
that unharvested crops were personal property under Kansas law.
Generally, a resource, for SSI purposes, includes assets that an individual owns and
could convert to cash to be used for his or her support. See 20 C.F.R. § 404.1201(a)
(1998). If the individual has the right, authority, or power to liquidate the property
(or his or her share of the property), it is a resource.
See id. Under the Program Operations Manual (POMS), an individual is deemed to have
an ownership interest in an unprobated estate when documents such as a will or court
records indicate that the individual is an heir to the property of a decedent, or
the individual has use of the property or receives income from it, or the individual
is related to the decedent such that he or she is entitled to a share of the property
under state intestacy laws, and the inheritance, use of income, and distributions
are uncontested. POMS SI 01120.215B(2). The interest in an unprobated estate is not considered a resource, however, until
the month following the month in which it meets the definition of income. POMS SI 01120.215B(3).
An inheritance is considered income when it is received. See POMS SI 00830.550; see generally 20 C.F.R. § 416.1123(a). Inheritance is generally assumed to be received,
absent regional instructions regarding state law to the contrary, at the earliest
of either the date the individual alleges receiving the inheritance, or the date the
estate is closed. See POMS SI 0083.55B(B)(2).
Until termination of his or her appointment, a personal representative has the same
power over the title to property of the estate that an absolute owner would have.
This title, however, is held in trust for the benefit of the creditors and others
interested in the estate. Neb. Rev. Stat. § 30-2472. This definition of a personal
representative's title to estate property coupled with section 30-2401's mandate that
upon the death of a person, his or her real and personal property devolves to the
persons to whom it is devised by his or her last will indicates that an heir takes
equitable title to real and personal property under Nebraska law while a personal
representative holds such property only in trust. Neb. Rev. Stat. § 30-2401 (Reissue
1995). Nebraska common law supports this position.
The passage of title to the heirs does not require settlement of the estate or a probate
order declaring heirship to vest title, Brtek v. Cihal, 515 N.W.2d 628 (Neb. 1994),
even though the personal representative has the right to take possession and control
of the decedent's real property. Neb. Rev. Stat. § 30-2470 (Reissue 1995). However,
real or personal property may be left with or surrendered to the person presumptively
entitled to it unless or until, in the judgment of the personal representative, possession
of the property will be necessary for purposes of estate administration. Id.
Therefore, a Nebraska heir retains the right to possession of property while such
property is held in probate. If a personal representative takes possession of such
property, he or she does so only in trust, with equitable title remaining with the
heir. Therefore, the property held in trust by the personal representative would remain
a resource for SSI purposes because there is no bar to the conveyance of an interest
of such property.
Some problems may arise when the agency tries to appraise the fair market value of
personal property that is held in probate. It should be remembered by anyone appraising
such property that the fair market value of such items is reduced by the fact that
the heir has only an equitable interest in such property. True fair market value can
only be measured when an heir has legal title to transfer such property.
Determining the fair market value of that interest prior to the distribution of the
estate may be difficult in some cases, however, since personal and real property may
be sold or the interest in the estate may be expended to cover the 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. 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. Should assistance be required in properly
evaluating the value of an estate, you may refer any relevant information to our office
for an opinion.
Crops as Personal Property
In Kansas, crops growing on land at the time of death of a decedent pass to the personal
representative as part of the personal property of the estate. Lindholm v. Nelson,
264 P. 50 (Kan. 1928). Unharvested crops are also considered personal property in
Iowa, Jones v. Hughes, et al., 506 N.W.2d 810 (Iowa Ct. App. 1993), Missouri, Davis
v. Cramer, 176 S.W. 85 (Mo. App. 1915) and Nebraska, In re M~'s Estate v. Knicely,
et al., 287 N.W. 760 (Neb. 1939). Therefore, POMS SI 01110.100C should include crops as personal property for all four states in Region VII.
In all states in our region, you may assume that an individual has an alienable property
interest in an estate as of the date of death of the testate or intestate. Therefore,
an interest would be received and constitute income or a resource as of the date of
If the individual has attempted to disclaim his or her interest, or if there are any
other unresolved issues that prevent you from determining the income or resource status
of an inheritance, we suggest that you refer any relevant information to our office
for an opinion.