Monrovia, CA asked in Estate Planning and Social Security for California

Q: Mom is 78 and rec'v monthly Survivors Benefits from SS. She is a beneficiary for an IRA/401K. Will she lose her SS?

Her brother died, he was 75 and had no dependents. Mom is the next of Kin. She receives her deceased spouses SS Retirement benefits that started when she retired at 62. She was left to take care/close out his banking and found out he had a 401K and an IRA. She is a beneficiary on one and had to fill out a small estate affidavit for another. It was suggested that she get paid out vs. taking withdrawals due to her age. I'm reading mixed info if her SS will be affected/stopped due to this one time inheritance of the 401k + Ira AND the money she gets from closing his bank accounts. Someone suggested I open a Special Needs Trust, but not sure if she qualifies?. Not sure where to go/ask to help her set this up correctly? Any tips/advice?

2 Lawyer Answers
Nina Whitehurst
Nina Whitehurst
PREMIUM
Answered
  • Estate Planning Lawyer
  • Crossville, TN
  • Licensed in California

A: It depends a great deal on what kind of benefits she is receiving. If she truly is receiving Social Security survivor RETIREMENT benefits, then the inheritance will not impact her benefits eligibility at all. If she is receiving something else, like SSI, the inheritance would impact her benefits and she should see an attorney with expertise in special needs planning right away to prepare.

Jackie Marie Howard and James Edward Berge agree with this answer

1 user found this answer helpful

Jeffrey Louis Gaffney
Jeffrey Louis Gaffney
Answered
  • Estate Planning Lawyer
  • Carlsbad, CA
  • Licensed in California

A: If she is receiving SSI then sudden money will kick her off, probably. If she is getting regular SS then that won't stop, but it may make some of it taxable.

The Special Needs Trust would have to be a Pooled Trust because of her age. A charity runs it and decides how to spend the money (ick) and in the end keeps the leftover money for their charitable purposes.

James Edward Berge agrees with this answer

1 user found this answer helpful

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