We’re finally ABLE to Create a Nest Egg for the Disabled

ABLEAfter eight years and thousands of man hours of study, the Senate finally passes the Achieving a Better Life Experience (ABLE) Act.  This is welcome legislation in light of the practical elimination of the health savings account under the Affordable Care Act.

The ABLE Act was enacted for families caring for disabled loved ones allowing them to set up a savings account to be used to pay expenses related to their care.  Although the account is establish with after tax dollars, all growth in these accounts would be tax-deferred. Importantly, these accounts would not be considered as a ‘countable’ resource (unless the balance in the account exceeds $100,000) for federal needs-based programs such as Medicaid and Supplemental Security Income (SSI). This is a huge advantage for disabled individuals who, before the ABLE Act, had to impoverish themselves before they could qualify for these programs.  Once signed into law by President Obama, regulations will still need to be drafted with the states needing to establish their specific “ABLE” programs.

Eligibility for ABLE programs will be fairly straightforward.  An individual will be eligible to establish a savings account if they: (1) became disabled prior to age 26 and; (2) are receiving either Social Security Disability Insurance (SSDI) or SSI; or (3) file for a disability certification (The rules for the certification have yet to be written by the IRS but the Act is intended to amend the IRS provisions of Section 529 of the Code).

There will be a list of permissible uses for the funds in these savings accounts but fortunately, that list is very broad.  Education; housing; transportation; employment training; assistive technology and personal support services; health expenses including prevention, and wellness care; financial management; legal fees; and funeral and burial expenses are currently permitted expenditures and the list could become even broader as the regulations are written. 

You can learn more about this topic as well as other strategies on our website under the tab entitled: special needs planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.

REF: Autism Speaks (December 17, 2014) “10 Things to Know About the ABLE Act” https://www.autismspeaks.org/news/news-item/10-things-know-about-able-act?

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The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.