4 THE QUEENS COURIER • HEALTH • MARCH 3, 2016 FOR BREAKING NEWS VISIT www.qns.com health The Elder Law Minute TM Should an SSI Recipient Refuse an Inheritance? BY RONALD A. FATOULLAH, ESQ. AND STACEY MESHNICK, ESQ. Supplemental Security Income (SSI) benefi ciaries must comply with very stringent income and asset rules in order to receive their benefi ts. One of the most basic rules is that a single SSI benefi ciary may not possess more than $2,000 in countable resources. Therefore, when an SSI benefi ciary discovers that he or she will receive an inheritance, the fi rst reaction may be to refuse it. But this refusal, also known as a disclaimer, may not be the best solution. The Social Security Administration (SSA) considers an inheritance to which a benefi ciary is entitled as a countable resource, even if it is never actually received. Hence, if a benefi ciary disclaims an inheritance, it is still considered a transfer of resources. In other words, disclaiming an inheritance is a transfer of assets, even if the money is never received. As a result of transferring assets, SSA penalizes a benefi ciary for a time period of up to three years, during which the monthly benefi t will be cancelled. In order to calculate the period of ineligibility, one must divide the transfer by the monthly benefi t. For example, if a benefi ciary receives $733 monthly and transfers $7,330, he or she will be ineligible for benefi ts for a period of 10 months. If the benefi ciary transfers $50,000, he will be ineligible for the maximum period of three years. When confronted with this situation, a common reaction is to believe that the SSA “will never fi nd out” because money is not passing through the account. Acting upon such a reaction is faulty and fraudulent, as it violates federal regulations. An SSI benefi ciary has a legal obligation to notify the SSA if he or she becomes entitled to assets as well as to let the agency know if the assets were disclaimed. Failure to ELDER LAW inform the SSA may result in additional penalties and may, in certain circumstances, result in criminal prosecution of the benefi ciary or family members who are managing his or her affairs. Fortunately, an SSI benefi ciary does not have to “lose” the unexpected inheritance. There are options, depending on the individual’s circumstances. A disabled benefi ciary under the age of 65 can accept the inheritance and then transfer the funds to a special needs trust or a pooled trust without affecting his or her monthly benefi t. Once the assets are held by the trust, the benefi ciary will be entitled to continue receiving SSI benefi ts, and the trust funds may be used for his or her benefi t. In an alternative scenario, depending upon the circumstances, the benefi ciary may wish to transfer/gift the funds to a family member and lose his or her benefi ts until the ineligibility period ends. It is important to consult with a knowledgeable attorney who can discuss with the benefi ciary and his or her family the optimal plan for their particular situation. Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law fi rm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Stacey Meshnick, Esq. is a senior staff attorney at the fi rm who has chaired the fi rm’s Medicaid department for over 15 years. The law fi rm can be reached at 718-261-1700, 516-466-4422, or toll free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management fi rm can be reached at 516-466-3300 or 800-353-3775. 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