Coming Soon: The ABLE Account
Thursday, January 14th, 2016
Good morning everyone, and welcome back to our blog this week! Thanks for visiting us again today – we really appreciate that you take the time out of your busy schedule to drop by.
Those of you that have been visiting our website and reading our blogs regularly are aware that here at M&, we are staunch advocates of the ABLE Act legislation and account. Over the last few years, we have been tracking its progress through congress, and writing blog post after blog post urging readers to take action and to advocate for the ABLE Account in their own states. We feel very strongly that this account would be an excellent addition to any special needs financial planning tool kit. If you browse through our blog archives (and we encourage you to do so), you will find posts introducing the legislation, describing how these accounts would benefit individuals with disabilities, and ranking it against other special needs financial tools such as the special needs trust. In fact, we have been so excited about this new account and the possibilities it will open up for our clients that we have a blog category devoted to blog posts on the topic. (Click here to access).
Well, today we can contribute another post to that category, as we have some incredibly exciting news to share with you about the ABLE account: as reported in numerous news articles (the Wall Street Journal and Disability Scoop, just to name two) the ABLE account may be available for individuals much more quickly than previously assumed. In fact, it may be available in the next eight to ten weeks!
Interested? Read on to learn more!
The ABLE Account: A summary for new readers
An ABLE account is a savings account that is established for the sole use of an individual with disability. The account is set up like a 529 college savings account will allow individuals with disabilities to accumulate savings that are not subject to federal and/or state tax – provided the funds are used for qualifying expenses. In addition to this, the savings in these accounts will not affect an individual’s eligibility for government benefits. This account is intended to supplement, not supplant, federal benefits and benefits paid through Medicaid, private insurance, and employment.
The National Down Syndrome Society (NDSS) is an avid advocate and ardent supporter for the ABLE Act and the resulting ABLE account; they identify a number of benefits that would result from enabling access to this type of savings account. As stated on their website, “An ABLE account could fund a variety of essential expenses for individuals, including medical and dental care, education, community based supports, employment training, assistive technology, housing, and transportation. The ABLE Act provides individuals with disabilities the same types of flexible savings tools that all other Americans have through college savings accounts, health savings accounts, and individual retirement accounts.”
If you would like more information about ABLE accounts, and how they can become an important part of your special needs financial plan, please contact us! We would love to help you design a Comprehensive Special Needs Financial Life Plan that takes into account the needs of the individual with disability and the family as a whole, spanning across two generations. Click here for more information.
ABLE Accounts: Coming Soon
Now for the really exciting news! According to reports in the Wall Street Journal and Disability Scoop, recently passed legislation may make ABLE accounts accessible to individuals with disabilities within in the next couple of months; as is written on disabilityscoop.com, “tucked inside a tax bill approved by lawmakers last month is a provision that will permit individuals with disabilities to open new accounts established under the Achieving a Better Life Experience, or ABLE Act in any state, regardless of where they reside. The change means that people with disabilities across the country will be able to open ABLE accounts when the first state programs are up and running, which could happen as soon as February or March, advocates say.”
This news isn’t only positive in terms of when individuals with disabilities can access these accounts; it also opens up the market and allows individuals with disabilities to look outside their state and find the ABLE account that best suits their needs. Thanks to this legislation, individuals with disabilities aren’t limited to the ABLE accounts provided by their states – this is especially helpful to individuals in smaller states that may not be able to institute a large variety of options for ABLE accounts. They can shop around, browse their options, and choose an account that best suits their individual needs. And, according to experts, the new state-wide legislation also has the added (perhaps unintentional) bonus of improving the ABLE accounts from within. According to the Wall Street Journal, the fact that individuals can now shop for ABLE accounts across state boundaries does not only give the consumer more options, but may force states and banks to improve the offerings to consumers: “Over time, experts expect there to be competition among states to attract out-of-state residents to their 529 ABLE programs, which may result in lower fees and better investment options for consumers.”
Currently, 35 states have passed legislation for ABLE accounts, with 4 states expected to be offering these accounts within the next few months – Florida, Ohio, Virginia and Nebraska. It should be noted that this information is very preliminary, and details regarding how states will accommodate out-of-state residents, and how much fees will be to open accounts, are to be determined. Please stay tuned to M&L’s blog, as we will release this information as we receive it.
Would You Like More Information?
If you would like to learn more about ABLE accounts, and how they could potentially contribute to your special needs financial plan, please contact us! We would love to sit down with you and discuss that financial goals and milestones for your family member with special needs, and your family as a whole. If you would like to remain in the loop as to what is happening with the ABLE account, and when it will be accessible for your family member with special needs, please take a moment to sign up for our newsletter – we will be posting updates as to the status of the ABLE account via our weekly blog posts.
Thanks again for dropping by – please join us next week for an exciting update on our community building non-profit, Integrated Living Opportunities (ILO). Until then!
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