One of the most frequent questions I still get is “should I get an ABLE account or a Special Needs Trust”? And the answer is, generally, both. There is a lot of potential to use them in a complimentary fashion, although there may be some instances where it’s more effective to just get the Special Needs Trust.
As a brief recap, or intro for those that are not familiar with ABLE accounts, here is a quick overview. The ABLE National Resource Center has done an amazing job compiling information about ABLE accounts, including a map allowing you to select each state; and run a comparison of various accounts. If you haven’t yet, I encourage you to check it out, here’s the link: http://www.ablenrc.org/. I will deliberately not be diving into what an ABLE account is, how you set one up, or its requirements in here.
ABLE accounts allow individuals with disabilities to accumulate up to a maximum of $100,000 while receiving SSI. Should the individual’s account exceed $100k, their SSI benefits will be suspended – but they will maintain their Medicaid. As of June 2017 you can only contribute $14k per year to an ABLE account.
Some ways I would incorporate them into a family’s plan include:
1) Saving an individual’s wages.
2) When charging a family member rent to maximize SSI, gift up to $14k back.
3) Use as a mid to long term investment vehicle for larger purchases insurance doesn’t cover; for example assistive or adaptive technology.
4) Housing or food costs (using a trust could jeopardize SSI).
These are examples, and don’t come anywhere near touching on everything it could be for. ABLE accounts are designed to help individuals with disabilities increase their level of independence and do more than just “survive”. Individuals do not have to justify their spending to a trustee, although they should be tracking what they spend the money on – and from what I’ve seen the accounts themselves provide tools for this on their websites.
In my opinion, ABLE accounts are fantastic tools; but do not replace the need for a Special Needs Trust. I encourage families to think outside the box – instead of focusing on what our children/siblings can’t do let’s start imagining what they could do, with the right supports. Disability rights momentum is gaining, there are opportunities for our children now which didn’t exist just 10 years ago; and it’s my hope this continues exponentially.
You can do your part by having a willingness to accept there may be failures, and the change may not be pretty. Sure, there is a possibility the money in an ABLE account may be spent frivolously; but in my opinion that’s just part of being independent (not that I’d be happy about it). Can any of us honestly say we’ve never wasted any of our money?
All I ask is this. Instead of immediately saying to yourself “my son/daughter could never…”; replace it with “I will let my son/daughter try ___________, and though they may not be successful right away (few of us are) I will continue to be supportive”. The reality is there will still be things outside of their capability, at least for now. But technology is evolving, providing capabilities I never would’ve considered. As one example – the app “Be My Eyes“.
Circling back to the ABLE account, you don’t need a financial advisor/planner to set one up; I opened my son’s in Virginia (Maryland’s isn’t available yet) and I found it very user friendly. If you’re not sure how an ABLE account will tie into your overall plan, or if it’s right for you, then consult with an advisor/planner – but make sure they understand special needs planning; because we are not the same.