♠ Posted by Marc J. Soss in 2015 Retirement Account Contributions,estate plan,estate planning,florida estate planning,florida probate attorney,florida probate lawyer,Last Will and Testament,Revocable Trust,Sarasota attorney at Tuesday, September 29, 2015
The Achieving a Better Life Experience
(the ABLE Act) was signed into Federal law on December 19, 2014. Each state is
responsible to pass legislation to create the vehicle for ABLE accounts to be
created and administered. The law creates a new savings vehicle for those individuals
suffering with disabilities. The account funds can be utilized for education,
medical and dental care, job training, housing, transportation and other
expenses.
The first $100,000 is disregarded when
determining SSI (Social Security Income) eligibility. Without this Act a person
receiving Medicaid could only have personal liquid assets of $2,000 or less. Contributions
grow tax free and withdrawals for qualified expenses are also tax free.
Eligibility for an account requires an individual
to be entitled to Social Security benefits, based on a blindness or disability
that occurred before the date on which the individual turned age 26. A
beneficiary is limited to one ABLE account and the account must be set up and
established in the state in which they live. Account contributions are treated
as a completed gift (they are non-deductible cash contributions) and limited to
$14,000 per year.
An ABLE Account may be rolled-over tax
free from one account to another for the same beneficiary, but only once in a
12 month period. Any amounts remaining in an ABLE Account at the beneficiaries
death are subject to a claim from the state for an amount to replace Medicaid
payments made by the state.
In contrast, a Special Needs Trust can
be established for any age beneficiary and is not subject to this payback
provision. There are also no dollar limits that can be contributed or
accumulated in a Special Needs Trust.
