A recent blog discussed the 2014 passage of the federal ABLE Act and the 2015 Florida ABLE Act permitting tax-advantaged ABLE savings accounts to be owned by qualifying disabled persons. The ABLE accounts are significant because they pose no threat to eligibility for SSI, Medicaid, and certain other means-tested government programs, so long as the $100,000 maximum balance is not exceeded. Though far from a complete solution to financing the special needs of disabled family member, these accounts provide a less complicated, lower budget way to these accounts have the potential to be a huge boon to the disabled population in our country and state, many of whom have special needs that are not met by their entitlement to SSI and Medicaid benefits.
If the full annual contribution maximum of $14,000 is made each year, the $100,000 ABLE account cap will be reached in less than eight years. However, because there are so many eligible uses for ABLE funds —- education, transportation, medical, housing are just a few of the eligible spending categories — it is likely that at least a few thousand dollars a year will be spent on behalf of the ABLE beneficiary. This constant spend-down process can keep the ABLE account balance below the allowed cap over a much longer term of years.
In Florida, ABLE accounts will be held and administered by a non-profit ABLE organization under the monitoring of the Florida Prepaid College Board. Though administrative procedures for ABLE accounts are still in the development stage, interested persons can register on the Florida ABLE website for email updates on the process. In the meantime, once President Obama signs recent legislation that permits a disabled person to open an ABLE account in any state, you can begin comparison shopping all state plans to find the one that best meets your particular needs. With this new loosening of a state residency requirement, states will likely become more competitive in the guidelines and benefits they offer to ABLE account holders and contributors.
To date, the District of Columbia and the following states have enacted ABLE laws: Alabama, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Washington and Wisconsin. Several other states have bills under consideration.
The Law Office of Jeanne Coleman has extensive experience in working with divorce and post-divorce issues involving the special needs of disabled family members. Call her office today for a consultation regarding any divorce, dependency, or social security disability issue.