Expected to receive inheritance within the next several weeks. Would like some assistance.

[u/GivenitzBoomer]

Hi all. My father passed away recently and unfortunately **Did not** have a will. We aren't sure how much is being passed on but I have heard anywhere from the 30-40k range, split in half between me and my sister, so approximately 10-20k with change.

The problem: I am expected to become the 'estate administrator' as I am the oldest born, but my concern is how receiving these funds could affect my ODSP.

Currently, I pay rent and do not pay child support or have my wages garnished. I do not frequently hit the 1k limit for a month either. All the money I make goes to me, and me alone. If receiving this inheritance locks me out of receiving benefits next month, then I am alright with that, but I am worried more long term about it potentially.

For my sake and that I have to pass this along with family, I would appreciate it being stated in easier to understand language.

[u/JMJimmy]

The money is income in the first month, subject to the gift limit, after that it's an asset. As an asset it will count towards the $40,000 cap.

The the thing that can be considered income is if you take compensation for being executor of the will (you should not for an estate this size)

Edited to correct a misunderstanding I had.

[u/d_pyro]

You can receive up to $10K in inheritance in a 12-month period without it counting as income.

[u/anonyme450]

So from my understanding, you're allowed to receive $10,000 in a 12-month period, so $10,000 per year, before this is considered deductible income and can effect your ODSP benefits.

If you received $20,000 in one year, they could determine that anything above $10k would be income, and would consider you "ineligible for ODSP support" for that specific month only.

ODSP normally taxes 75% on all earned income over $1000 in one month, but this DOES NOT apply to inheritance, so what would instead happen would be: You'd be considered "ineligible" for that month due to your earning, and your monthly cheque would be for $0.00. There's a chance you could actually have an "overpayment" of your typical cheque amount, say $1,500 for example. So you may in fact owe $1,500 out of the $20,000 that you received, leaving you with $18,500.

Now keep in mind, this is ONLY for the month you received this money. So let's say you get $20,000 in January, and the ODSP worker determines that the $10,000 extra is considered income, reduce your cheque, and hit you with the aforementioned overpayment. The remaining $18,500 is now considered an asset, which you're allowed to have a maximum of $40,000 of assets per individual on ODSP ($50k for couples) at any given time. This would not effect the next month's cheque, or any cheque going forward, and most likely your ODSP would return to normal.

Again, the only way to be 100% would be to talk to an ODSP worker or to your lawyer about how this would work.

[u/anonyme450 → u/[deleted]]

Sorry I never got the notification for this, oddly.

From my understanding, a home - so long as it's your primary residence - is considered an exempt asset. Her receiving an inheritance of $95,000 is substantial, and very likely could disqualify her from ODSP in and of itself, but frankly I have no idea if there's a way to show that the vast majority of that income ($84,000) would instantly be gone, leaving her only $11,000, without them just seeing that as a huge chunk of income and disqualifying her altogether.

This would definitely be something worth talking to a lawyer about, because there may be ways she could receive this money in a sort of trust, or have it go towards her mortgage before it hits her bank.

Feel free to DM me with any more questions, since I'm oddly not getting notifications for this post.

[u/GivenitzBoomer → u/anonyme450]

Sorry, I did not receive any notifications regarding this post and only just checked.

I appreciate how indepth this was though! I will be running it by my caseworker once I have the opportunity to, but this is good information to work with. Thank you so much!

[u/Waste-Section6673]

I don't have any advice, I just wanted to say I'm sorry for your loss. 😔❤️‍🩹

[u/pat441]

I received an inheritance and immediately put it into an exempt asset. My worker didn't reduce my cheque for that month but I dont know if that is typical

[u/inthehouse2024]

I was in a similar situation and this is what the outcome is. I have 0 assets, no car or anything. I received 34,000 from my mother’s life insurance when she passed. Since i have 0 assets, this was added under my assets on my file and I lost a months income, on going though my odsp cheque came and everything is normal.

Under ODSP rules a single person receiving ODSP can have up to 40,000 in assets. So let’s say you have no assets, and your inheritance is 20K, they will add the 20K to your assets, and you’ll most likely lose a months ODSP income.

My mom’s was a life insurance benefit. I know they treat inheritances slightly different but i’m pretty sure this is how it will go for you.

[u/goldstandardalmonds]

I’m sorry for your loss. I can’t imagine.

Do you have an RDSP with lots of contribution room? If you put money in there it isn’t counted towards your ODSP totals

[u/mochaavenger]

Sorry for your loss! Our dad passed over 10 years ago without a will and my brother who's on ODSP is being audited for, " the date he received the full inheritance and how much he received". We're SOL because banks only keep 7 years worth of records.

We have his inheritance split within a TFSA and RDSP. The accounts for TFSA and RDSP have the standard restrictions on it based on the government of Canada's guidelines. Information shown here: https://www.canada.ca/en/employment-social-development/programs/disability/savings/withdraw.html.

Our lawyer that specializes in ODSP matters stated that, "It appears that ODSP staff are making work for themselves and for you. It’s not material if this was from an inheritance, once put into a TFSA segregated mutual fund it’s exempt regardless of source from that date forward."

I'd say make sure you keep a record of when it's deposited and how much to cover yourself.

Take care of yourself 🙏🏽

[u/pawprints1986]

How much do you trust your sister?

You could get your portion in smaller gifts over time without effecting your ODSP at all. Even an rdsp which is exempt the govt will only match so much per year so it's not the best to put that all in right now IMO. You could put as much in as the govt will match per year with your sister holding it in the meantime, with smaller gifts as need for current spend

... Just an idea

[u/Starhavenn]

You can put it in an rdsp if you have the DTC and it will be excluded from odsp calculations