if someone left a person on SSI money but left it to someone they trusted to give it to the person?

Question

like a relative for instance to avoid the government taking it all, how could the taxes be handled?

Would they do best to do two tax returns one with and one without the inheritance and then deduct the difference from the inheritance.

The person potentially inheriting the money from a relative down the road will be eligible to switch to an ex-spouse's social security in 5 years..currently the person leaving the money has no will but kind of implied, the SSI recipient is going to get some money but worried they will not be able to keep any and may want to leave to someone else in order to help the person who is struggling.

Answer 1

an inheritance is inherited tax free federally by the person who gets it (although Pennsylvania does tax it), and it would have no impact on the Social Security that someone would receive, that is based on wages earned over the years and would not be affected by an inheritance. And since an inheritance is not taxed federally, the inheritance itself would not have any impact on the taxability of the SSI income. Any earnings that the person had after they received the inheritance might affect the taxability of the SSI, but would not affect whether the person got it or not or even how much they got.

Any taxes on the estate would be paid by the estate before it reached the person receiving the inheritance.

Answer 2

An inheritance isn't reported as income on your taxes. However, not reporting those funds to Social Security would be considered fraud. Even if it goes thru another relative, it is still addition househould income and would probably make you ineligible for SSI.

Answer 3

you may be able to place it in a trust fund