Receiving an inheritance is usually considered a financial blessing. But for someone who receives Supplemental Security Income (SSI), an inheritance can also create an unexpected problem.
Yes, someone receiving SSI can inherit money. However, the inheritance could affect their eligibility for SSI and other needs-based government benefits if the money is received directly.
That is why families with a loved one who receives SSI should consider the potential impact of an inheritance as part of their estate planning.
Why can an inheritance affect SSI?
SSI is a needs-based federal program for people who have limited income and financial resources and who are disabled, blind or age 65 or older.
In 2026, the Social Security Administration generally limits countable resources to $2,000 for an individual and $3,000 for a couple.
An inheritance can include cash, property or other assets received after someone dies. Social Security generally treats an inheritance as income in the first month in which it has value and is available to the recipient. If retained, those assets may then affect the person’s resources in subsequent months.
That means leaving money directly to a family member who receives SSI could unintentionally put that person over the program’s financial limits.
“Families naturally want to leave something behind to provide for someone they love, but when that person receives needs-based government benefits, the way the inheritance is structured matters,” said Lesley Byars, CPA, executive director of Alabama Family Trust. “Planning ahead can help families provide additional financial support without unintentionally creating problems with benefits.”
Can a special needs trust help?
For some families, a special needs trust can provide another option.
Rather than leaving an inheritance directly to an individual receiving SSI, a family may be able to arrange for assets to be placed into an appropriately structured trust for that person’s benefit.
Federal SSI rules recognize certain special needs and pooled trusts as exceptions to the general rules that can make a trust a countable resource. However, the trust must meet specific requirements, and how money is distributed from the trust can also affect SSI benefits.
“An inheritance can make a meaningful difference in someone’s quality of life, but families need to think beyond simply naming a loved one as a beneficiary,” Byars said. “A special needs trust can be an important planning tool for preserving assets for a beneficiary while helping protect eligibility for programs such as SSI and Medicaid.”
What if the person has already inherited the money?
Ideally, families address these issues before an inheritance is distributed. But sometimes a person receiving SSI unexpectedly inherits money or is named directly in a will.
That does not necessarily mean there are no options.
Depending on the beneficiary’s age, disability status, the source of the assets and other circumstances, certain types of special needs trusts may be available. Federal rules, for example, provide an exception for qualifying trusts established with the assets of a person with a disability who is under age 65. Different requirements apply depending on the type of trust.
Families should seek guidance promptly rather than simply giving away or transferring the inherited money. Giving away resources or transferring them for less than their value can itself affect SSI eligibility.
Planning before an inheritance happens
The best time to ask these questions is often before a will or estate plan is finalized.
Parents, grandparents and other relatives may want to review how they have designated a loved one who receives SSI, Medicaid or other means-tested benefits in wills, trusts, life insurance policies and other accounts.
“Families often assume that leaving money directly to someone is the best way to help them,” Byars said. “For a person who relies on SSI or Medicaid, good planning may allow those resources to provide additional support without undermining the benefits that are already an important part of that person’s financial security.”
Alabama Family Trust can help families understand their options
Alabama Family Trust is a nonprofit organization that helps individuals with disabilities, seniors and their families establish and administer special needs trusts. AFT works with families to help protect assets and support long-term financial planning while considering eligibility for important government benefits.
If you have a family member who receives SSI and may receive an inheritance, don’t wait until the money has already been distributed to start asking questions.
Talk with Alabama Family Trust about whether a special needs trust may be appropriate for your family and how planning ahead can help protect both an inheritance and access to important benefits.
Visit our frequently asked questions to learn more.
This article is for general informational purposes and should not be considered legal or financial advice. SSI, Medicaid and trust rules can vary based on an individual’s circumstances. Families should consult qualified professionals about their specific situation.