There is a new option for individuals with disabilities to save money and not forfeit their federal benefits. As of July 2016, Florida introduced ABLE accounts – short for Achieving a Better Life Experience. The benefits of this account are unique and only available in four states. Read below to see if an ABLE account is right for you or your loved one:
- Individuals who receive Medicaid, SSI or SSDI benefits have previously faced reduced benefits if more than $2,000 in assets were accrued. With an ABLE account, funds placed in the account do NOT count as assets for federal benefits eligibility.
- There is a huge tax saving benefit; an ABLE account is similar to a 529 college savings plan.
- An account can be established by a guardian, a parent, or by the disabled person. Anyone can contribute to the account; however, the account is always owned by the disabled person.
- There are three major limitations for the ABLE account: there is an account maximum allowance of $413,000. The disability must have developed before the age of 26. And, there is a Medicaid payback requirement. Therefore, it is not a substitute for a Special needs Trust, but rather a supplement.
- The funds don’t have to sit dormant. There are seven investment options to help the money grow.
Who needs this type of an account? It depends on you and your estate planning needs. Contact Shulman Law for a consultation regarding the estate planning for a disabled child or adult. There are programs such as the ABLE account that may be essential to proper planning, in conjunction with a Special Needs Trust or other planning options.