TN 7 (10-09)

PS 01805.041 Oregon

A. PS 09-174 State Statutes Concerning Receipt Date of an Inheritance (Title XVI): Alaska, Idaho, Oregon, and Washington States

DATE: June 29, 2009

1. SYLLABUS

This guide provided by the Seattle Regional Chief Counsel covers the inheritance laws in the Tenth Region for Supplemental Security Income purposes. Although in all four states of this region inheritances begin at the moment of death, the amount of the inheritance is subject to other complicating factors.

2. OPINION

QUESTION PRESENTED

When is an inheritance considered “received” by an heir in the states of Alaska, Idaho, Oregon, and Washington for purposes of counting it as income or a resource for Supplemental Security Income (SSI) eligibility? The purpose of this question is to establish and publish regional instructions to explain individual state laws pertaining to when an inheritance is “received.”

ANSWER

An inheritance is considered “received” by an heir in the states of Alaska, Idaho, Oregon, and Washington upon the decedent’s death. However, we advise against implementing regional instructions for all cases, because the value of an inheritance “received” may vary greatly until the individual actually receives the item(s) or the date the estate is closed. We therefore advise that in cases where an individual’s interest may be too speculative, you may assume that the individual derives no income until the earliest of either the date the individual alleges receipt of the inheritance or the date the estate is closed. The Office of the General Counsel is available to provide advice in analyzing fact-specific cases.

ANALYSIS

1. Federal Law: Income and Resources

The Social Security Act (Act) provides that an aged, blind, or disabled individual with a limited income, as set forth under SSI regulations, is eligible for benefits under Title XVI if his or her nonexcludable resources do not exceed $2,000 (or $3,000 if married) as of January 1, 1989. 42 U.S.C. § 1382(a); 20 C.F.R. §§ 416.1110, 416.1205(a), (c).

For SSI purposes, “income,” which may be earned or unearned, is defined as anything an individual receives in cash or in kind that he or she can use to meet the individual’s needs for food and shelter. 20 C.F.R. §§ 416.1102, 416.1110, 416.1120. A resource is defined as “cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his or her support and maintenance.” 20 C.F.R. § 416.1201(a). If a property right cannot be liquidated, it is not considered a resource. 20 C.F.R. § 416.1201(a)(1). In summary, income is “received” and can be used to meet an individual’s needs for “food and shelter”; a resource is “owned” and can be used for “support and maintenance.”

Except for amounts spent on the deceased person’s last illness and burial that are spent by the end of the month following receipt, death benefits (including inheritances) are considered unearned income upon receipt. 20 C.F.R. §§ 416.1102, 416.1121(e), (g). Unearned income is counted at the earliest of when it is received, credited to the individual’s account, or set aside for the individual’s use. 20 C.F.R. § 416.1123(a). Death benefits (including inheritances) are considered to be resources the month following the month in which they meet the definition of income. 20 C.F.R. § 416.1201(a)(4), Program Operations Manual Systems (POMS) SI 01120.215A(1).

Until an item or right has a value—that is, it can be used to meet the individual’s need for food or shelter—it is neither income nor a resource. POMS SI 00830.550(A)(2). If an individual was unaware of his or her ownership of an asset, the asset is not a resource during the period in which the individual was unaware of ownership. POMS SI 01110.117(A).

An individual is deemed to have an “ownership interest” in an unprobated estate, for purposes of treating it as a resource, if the inheritance, use of income, and distributions are uncontested and: (1) documents, such as a will or court records, indicate that the individual is an heir to the property of the deceased; (2) the individual has use of the property or receives income from it; or (3) the individual is related to the decedent such that he or she is entitled to a share of the property under state intestacy laws. POMS SI 01120.215(B)(2). To establish when the inheritance is received in the absence of regional instruction, it is assumed the individual derives no income until the earliest of: (1) the date the individual alleges receiving the inheritance; or (2) the date the estate is closed. POMS SI 00830.550(B)(2).

2. State Laws

The laws of Alaska, Idaho, Oregon, and Washington provide that a decedent’s property passes at death to those entitled to it, whether under a will or by intestate succession. An heir may assign or otherwise alienate his or her interest in the estate, although transfer of possession of that interest must await final closing of any probate action covering the estate. In the absence of probate, distribution is subject to the rights of creditors and others.

A. Alaska State Law

Alaska has adopted the Uniform Probate Code. Alaska Stat. § 13.06.005 (2009). Under Alaska law, a decedent’s real and personal property passes and has value to the heir at the time of the decedent’s death, regardless of whether there was a will or the decedent died intestate. Alaska Stat. § 13.16.005 (2009). The inheritance is subject to any homestead allowance, exempt property and family allowance, rights of creditors, the elective share of the surviving spouse, and administration. Id. Immediately upon the decedent’s death, title to the property is in the heirs. Sheehan v. Estate of Gamberg, 677 P.2d 254 (Alaska 1984). This is not dependent on the existence of a will, probating of the will, or completion of probate.

B. Idaho State Law

Idaho, which is a community property state, has adopted the Uniform Probate Code. Idaho Code Ann. § 15-1-101 (2009). Under Idaho law, a decedent’s real and personal separate property passes and has value to the heir at the time of the decedent’s death, regardless of whether there was a will or the decedent died intestate. Idaho Code Ann. § 15-3-101 (2009). The inheritance is subject to any rights to a homestead allowance, exempt property and family allowances, renunciation to rights of creditors, elective share of the surviving spouse, and administration. Id.

C. Oregon State Law

In Oregon, upon the death of a decedent, title to the property of the decedent vests in the decedent’s heirs, “subject to support of spouse and children, rights of creditors, right of the surviving spouse to elect against the will [if any], administration and sale by the personal representative.” Or. Rev. Stat. Ann. Title 12 § 114.215(1) (2009). Upon the death of the decedent, the title of his or her real property passes to the heirs, subject only to the right of the administrator to possession for payment of debts. In re Witherill’s Estate, 166 P.2d 129 (Or. 1946).

D. Washington State Law Washington is a community property state, which recognizes both spouses and domestic partners. Wash. Rev. Code Ann. § 26.16.150 (2009). Upon the death of a decedent, a one-half share of the community property is to be confirmed to the surviving spouse or surviving domestic partner; the other one-half is subject to testamentary disposition or intestate succession. Wash. Rev. Code Ann. § 11.02.070 (2009). The whole of the community property is subject to probate administration, including “payment of obligations and debts of the community, the award in lieu of homestead, the allowance for family support, and any other matter for which the community property would be responsible or liable if the decedent were living.” Id. Upon the death of the decedent, title to real property vests in the heirs immediately. Wash. Rev. Code Ann. § 11.04.250, 11.04.290 (2009). Subject to community property rights, nonprobate assets specifically referred to by will vest immediately upon the death of the owner. Wash. Rev. Code Ann. §§ 11.11.020(1), 11.11.060 (2009). An intestate interest is created only upon the death of the decedent. Matter of Estate of Baird, 933 P.2d 1031, 1035 (Wash. 1997).

CONCLUSION

The states of Alaska, Idaho, Oregon, and Washington all provide that an individual receives an inheritance at the moment of the decedent’s death. We note, however, that determining the value of the inheritance as of the date of the decedent’s death may pose some challenges. Any distribution of the inheritance is subject to diminution due to claims of creditors; exempt property and family allowances; rights of the surviving spouse to elect against the will or, in community property states (Washington and Idaho), the rights to an elective share by a surviving spouse or the surviving domestic partner in Washington. As a result, valuing the share of the inheritance while the assets are still subject to diminution before distribution may be difficult, if not impossible in some cases. “Until an item or right has a value (i.e., it can be used to meet the heir’s need for food or shelter)” it is neither income nor a resource. POMS SI 00830.550(A)(2). Where an individual’s interest may be too speculative, you may wish to assume that an individual receives the inheritance at the earliest of the date the individual alleges receipt of it or the date the estate is closed. POMS SI 00830.550(B)(2). An analysis of the date of receipt of an inheritance will depend on the specific facts of each case, and advice from the Office of the General Counsel is available on a case-by-case basis.

 


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PS 01805.041 - Oregon - 10/20/2009
Batch run: 11/29/2012
Rev:10/20/2009