Shouldn't an estate be treated like a trust?

[Dale Latimer]

If the estate of a parent owns the house I as a recipient live in, wouldn't it be treated like a trust if under no circumstances will it pay me (or I pay it) to live there? Certain kinds of trusts are regarded as not being resources to the recipient, allowing him/her the full benefit amount.

I recently had an SSI case re-heard at my local SSA office. The original decision was that because I had not been clear about who owned the house I currently live in (my parents died, mother in 2015 and dad in 2016), I was therefore receiving in-kind support and maintenance from my brother, who manages dad's estate but has left the house among the estate's assets, in part due to the unavailability of any suitable living space to me.

The SSA's initial plan was for me to both pay back $4,000+ in overpayments AND accept reduced supplements going forward. It didn't help that I also had over $2,000 accrued cash value in a life insurance policy whose premiums I assumed after dad passed.

The new decision (apparently, I had a tough time hearing the person doing the re-hearing) was that my supplements would not be reduced, but that I was still on the hook for the overpayments, which at $50/month will take about 7 ½ years to be resolved.

Right now I know that once the next supplement is paid Oct 1st, my combined resources (cash on hand + bank balance + supplement) will exceed the $2,000 resource limit, and I am seeking to get rid of around $500 to get those resources back to below the limit.

Should I appeal the decision again (it would go to an ALJ, I was told) contending the estate should be regarded as a trust, and will my local office accept any other payments to shorten the time needed to resolve the overpayments until the appeal is heard?

Thanks.

dL

 

[justalayman]

It’s not that the estate doesn’t pay you and it would make a difference if you paid the estate. It’s whether you benefit from it in the form of you don’t have to pay for your living expenses. That is what in kind support is.


A trust gets treated like a trust. Things that aren’t trusts don’t get treated like a trust because they aren’t trusts.

 

[Janke]

There are two basic issues.

1. Is the overpayment amount correct or incorrect? Was the right policy applied to your inherited assets? Details matter and all the documents should be read thoroughly. So appealing the amount/fact of the overpayment is probably something you should do because you still disagree.

2. If the overpayment amount is correct, then how much of it is your fault? This will be an analysis of actions you took and when you took them and what was your intent and has something similar happened before. If you can be found without fault, and then also meet inability to repay, then even if the amount is right, the overpayment can be waived, written off, not collected. Sounds like you do feel it is not your fault.

You lose nothing by filing to the ALJ, as long as you are at that level of appeal. And collection of the overpayment is supposed to be suspended when an appeal or waiver is filed and until a decision is made. May take a year to get a hearing. You get a fresh set of eyes, and a staff to organize the file. An ALJ is first a lawyer and then an SSA employee. And they have greater latitude to interpret policy than the lower level. I also think they get tired of making decisions about bad backs and enjoy the challenge of an overpayment appeal that does seem to be a higher technical legal detail.

 

[LdiJ]

It’s not that the estate doesn’t pay you and it would make a difference if you paid the estate. It’s whether you benefit from it in the form of you don’t have to pay for your living expenses. That is what in kind support is.


A trust gets treated like a trust. Things that aren’t trusts don’t get treated like a trust because they aren’t trusts.

I do believe however that someone is allowed to own a home while on SSI. It sounds as though the OP owns 1/2 of this home. Therefore I do not see this as support provided by someone else.

 

[Taxing Matters]

I do believe however that someone is allowed to own a home while on SSI. It sounds as though the OP owns 1/2 of this home. Therefore I do not see this as support provided by someone else.

The problem is that the estate apparently currently owns the home, not the OP. And while the OP may be a beneficiary of the estate and eventually get an interest in the home, being a beneficiary of the estate is not the same thing as actually owning the property. While the property is in the estate, the executor should be collecting rent from anyone who is using the property to meet his/her fiduciary obligations to the estate (unless, of course, the executor is the sole beneficiary). If the estate is letting the OP live there rent free, that is indeed likely to appear as support provided by the estate.

 

[justalayman]

I do believe however that someone is allowed to own a home while on SSI. It sounds as though the OP owns 1/2 of this home. Therefore I do not see this as support provided by someone else.

As taxing matters stated, he doesn’t own the home. The estate is paying for op’s housing. If op owned the home he would have costs involved. It appears the estate is letting him live there totally free. That is a financial benefit to the op.

In essence it would be no different if he lived with his parents, for free, while they are alive or living in their home, for free, after they died. Your ssi is discounted when somebody provides a financial benefit to you.

If they transfer it into op’s name and op gets to pay for all the expenses, then his ssi won’t be discounted any longer.

 

[LdiJ]

As taxing matters stated, he doesn’t own the home. The estate is paying for op’s housing. If op owned the home he would have costs involved. It appears the estate is letting him live there totally free. That is a financial benefit to the op.

In essence it would be no different if he lived with his parents, for free, while they are alive or living in their home, for free, after they died. Your ssi is discounted when somebody provides a financial benefit to you.

If they transfer it into op’s name and op gets to pay for all the expenses, then his ssi won’t be discounted any longer.

Do we have enough info to assume the bolded?

 

[justalayman]

Do we have enough info to assume the bolded?

well, anybody that owns a home is faced with costs so that’s a given. To the second statement, well, I think of you reread the original post you will see it

 

[Janke]

This was an unprobated estate. There is policy on how to treat it. If he was to inherit under the will, then he would have ownership interest in the home and it would be an excluded resource with no in-kind income charged. Assuming all the criteria listed in the link below were met.

https://secure.ssa.gov/apps10/poms.nsf/lnx/0501120215

Or did the father leave the house to the OP as a life estate; the right to live in the house without the right to proceeds from the sale of the house? That also would be ownership interest and no ISM.

 

[justalayman]

This was an unprobated estate. There is policy on how to treat it. If he was to inherit under the will, then he would have ownership interest in the home and it would be an excluded resource with no in-kind income charged. Assuming all the criteria listed in the link below were met.

https://secure.ssa.gov/apps10/poms.nsf/lnx/0501120215

Or did the father leave the house to the OP as a life estate; the right to live in the house without the right to proceeds from the sale of the house? That also would be ownership interest and no ISM.

Per your link it appears the SSA considers a jointly owned property as just that and as such, if op benefits from brother allowing op to use Brothers share of the home, op is receiving benefits from the brother. In rereading the thread, that is exactly what the op stated; SSA has determined op is recieving benefits from the brother, not actually the estate.

Would it be better to simply complete probate and if brother is accommodating to actually transfer entire interest in the property to op? From what I have read the shared ownership is the problem. Again, it appears to end up being no different than when an SSI recipient is given free housing from a parent.

 

[HRZ]

OP you need to pay more attention to the rules and spend less time debating them.

1. IF you are receiving a lot of inkind support from estate/brother ...we'll get executor to put a businesslike lease inplace and actually pay rent .

2. IF you have excess assets re means testing...spend them down quickly , see 1 above .

 

[LdiJ]

Per your link it appears the SSA considers a jointly owned property as just that and as such, if op benefits from brother allowing op to use Brothers share of the home, op is receiving benefits from the brother. In rereading the thread, that is exactly what the op stated; SSA has determined op is recieving benefits from the brother, not actually the estate.

Would it be better to simply complete probate and if brother is accommodating to actually transfer entire interest in the property to op? From what I have read the shared ownership is the problem. Again, it appears to end up being no different than when an SSI recipient is given free housing from a parent.

I am sorry but that still makes no sense to me. Someone is allowed to occupy a home that they have an ownership interest in. When someone is living with a parent they have no ownership interest (or most of the time they don't). Now if brother owned the home 100% and simply allowed the OP to live there then it makes sense. However, that does not appear to be the case. That may however be what the SSA thinks is going on and that might explain the problem.

 

[HRZ]

So far it is unclear if OP owns any interest in the home and apparently he is not the executor either , brother is.

IT may be far easier to sidestep a problem than it is to debate it with a bureaucrat.

 

[HRZ]

AS an aside, your parents may have provided a "free" home but the executor has no duty to provide free use of estate assets in fact he is supposed to quite prudent in how he handles same ...and if the best outcome for the estate is to get it sold...so be it and in the meantime the tenant can be expected to pay a reasonable rent or the executor seeks eviction.

 

[justalayman]

I am sorry but that still makes no sense to me. Someone is allowed to occupy a home that they have an ownership interest in. When someone is living with a parent they have no ownership interest (or most of the time they don't). Now if brother owned the home 100% and simply allowed the OP to live there then it makes sense. However, that does not appear to be the case. That may however be what the SSA thinks is going on and that might explain the problem.

I said the similarity is if the home is co-owned. Per the link Janke provided it states the share not owned is treated as a separate issue. Gifting of the use of the others interest would be recieving support from that owner.

In other words; they treat is as the op owns only a portion of the home and if the other owners do not receive rent from the SSI recipient, the SSI recipient is being gifted that share of the costs of housing.


At least that’s how I read it.