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ABLE Accounts for Special Needs Planning

ABLE accounts may be a great tool
ABLE accounts may be a great tool for families who need special planning.

The Achieving a Better Life Experience Act (ABLE) accounts were created to provide a tax-advantaged savings tool for individuals with disabilities and their families.

Millions of Americans with disabilities and their families depend on government benefits to help provide income, health care, food and housing assistance. Eligibility for assistance through Supplemental Security Income, SNAP and Medicaid is based upon a resource test, so disabled individuals seeking benefits are typically limited to no more than $2,000 in savings or assets. This can present a difficult problem.

nj.com’s article, “ABLE accounts–A tax advantaged tool for special needs planning,” advises that when used correctly, this overlooked savings account may allow families to build a small nest egg, without affecting eligibility for government program benefits.

An ABLE account is designed to be a savings or investment account to supplement government benefits. It can be a powerful strategy for individuals, who previously were unable to build supplemental funds outside of a trust for their needs. These accounts are funded with after-tax contributions that can grow tax-free when used for a qualified disability expense. The account owner is also the beneficiary and contributions can be made from any person including the beneficiary, friends, and family.

These accounts are available to individuals with significant disabilities whose age of onset of disability was before they turned 26. A person could be over the age of 26 but must have had an age of onset before their 26th birthday.

Contributions are restricted to $15,000 per year. The total contribution amount per beneficiary is limited by state law. Individuals can have up to $100,000 in an ABLE account, without impacting SSI eligibility. The first $100,000 also does not count toward the $2,000 resource restriction.

A frequently asked question is whether to use an ABLE account or a Special Needs Trust (SNT) for planning purposes. ABLE accounts are subject to certain limitations that make it impossible, or at least ill advised, to use them instead of a SNT, but they may be a great tool in addition to an SNT. Remember that ABLE accounts can only receive $15,000 in deposits each year, but, in most cases, Special Needs Trusts can receive much larger contributions. This is an important difference for parents who want to leave more substantial assets to their child when they die but don’t want to jeopardize the child’s eligibility for critical services.

When the beneficiary of the ABLE account passes away, any funds left in the account are typically reimbursed to the state to defray the costs of providing services during the beneficiary’s life. However, that may not happen with a properly drafted Special Needs Trust.

As of 2019, ABLE account owners who work, but don’t have an employer-sponsored retirement plan, can now save up to $12,140 in additional savings from their earnings.

Ask your estate planning attorney about possibly coordinating an ABLE account with a Special Needs Trust.

Reference: nj.com (April 20, 2019) “ABLE accounts – A tax advantaged tool for special needs planning”

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Pet Trusts

You wonder whether your granddaughter will think of you fondly when you’re not around anymore.

You want to make sure someone will love and care for your dog, horse, or parrot when you can’t.

Your spouse doesn’t share your love for guns, and you fear your collection could be sold for almost nothing – or even destroyed – instead of being passed on to your children or others who share your passion.

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What Our Clients Are Saying

I’ve been working with Cindy and her firm since 2019 (after being recommended by my attorney in Alaska) and have found her and her staff to be personable and professional. I have recommended her to several friends who need estate planning assistance more than they could possibly imagine.

Dale H.

You and your husband were a delight to work with. Easy, quick and pleasant. Will certainly call you for our future needs. Best wishes.

Martin C.

We Thank You Tim and Cindy for all your expert advice and professionalism! We will definitely refer your legal team to any of our friends and family. Thanks again!

Joey S.

Cindy, Just wanted to do a follow-up – I picked-up my first can last night from the dealer! It took about 6 months, but everything went smooth with the [Gun] Trust you did for me. Thanks again!

Mike S.

Cindy, thank you for your prompt attention and completion of my gun trust. I only wish I had come to you sooner and would have saved $189 for a standard trust package from another law firm in Tampa, which was utterly confusing. Thanks much and will be seeing you in the future for my legal needs.

Arthur G.

I am very happy with all the services that Cindy rendered. I couldn’t have asked for any better help than what she gave to me in setting up Medicare and Medicaid for my cousin, Ron. Cindy is very friendly & prompt with her help. I would highly recommend her to everyone. Thank you Cindy.

Bill G.

Cindy has done a professional service with my time and trustworthy explanation of her programs. Any questions were responded clear and concise. Thanks for fast and efficient service.

Mickey M.

Cindy helped us with our estate planning and she was great!! She is extremely knowledgeable and super fun to work with!! Thanks Cindy!!

Kyle S. & Wendy Y

Cindy Clark prepared our estate planning documents and did a great job. Very thorough and organized. I’d highly recommend her and her firm for all areas of law she specializes in.

Chris B.

Very knowledgeable, easy to work with, and personable. Highly recommend!

Travis C.

Cynthia and Tim were absolutely terrific in guiding us through our Trust creation process, They responded quickly and comprehensively to all our questions. Very professional! Highly recommend!

Linda R.

Cindy is a customer-oriented professional who makes the law understandable. It was a real pleasure to work with her and her staff.

Janice B.

Tim and Cynthia provided us very professional guidance for our legal documents. Easy to communicate and answered the many questions we had. Thank you for all of your help.

Carl B.

Cindy is easy to talk to, she listens to me, answers all my questions, and is very smart. I would recommend her to anyone who needs an estate planning attorney.

Joan

Attorney Cynthia M. Clark and her staff provided excellent service in creating and preparing news will and associated documents for my wife and myself.

They carefully guided us through the process, clarified questions, and made us extremely comfortable with the process. We highly recommend them.

Fred

Cindy and her staff helped my husband and I with our wills…. making sure our affairs were in order, and giving us peace of mind, after our Ohio lawyer failed to complete the process and left us wIth no wills during the Covid virus.

Deb

Attorney Clark is exceptional! She has a financial background as well as legal which is a necessary combination when Estate planning. She is honest and truly cares about her clients. I’m grateful to have found her and wouldn’t hesitate to recommend her.

Elizabeth

Cindy is a customer-oriented professional who makes the law understandable. It was a real pleasure to work with her and her staff.

Chris

Manasota Elder [Law] just executed a trust for me. I’m very pleased by their professionalism and will next ask them to update my will. I highly recommend Cynthia and Tim Clark for your legal needs.

Julie

She is the best of the best! Not only highly intelligent but caring. That’s hard to find these days. She helped my 93 yr old family friend through everything and was so smart and kind. I give her 5 stars!

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