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Source: Reprinted from the January 2018 Newsletter of Sheri R. Abrams, Attorney at Law, www.sheriabrams.com
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This year started out on a somber note for me following the death of my friend and colleague, Buckley Kuhn-Fricker, and her husband, Scott. The story of what happened shocked not only those of us who knew her , but the entire nation. It was an absolute tragedy.
I attended their memorial service earlier in the month, and I was joined by well over 800 people. It's never easy to say goodbye, but the service and reception were a beautiful tribute to such kind and wonderful people.
In legal news, the passage of the tax bill last month brought some new changes to ABLE Accounts. Under the new legislation:
- If you have an ABLE account and you work, you can put up to an extra $12,060 of your earnings into your account (on top of the regular $15,000 that is allowed). The $12,060 must be from your own earnings - it cannot be contributions from others or money you get from benefits or other unearned income.
- Note: This means that if you earn $12,060 or more, you could have a total of up to $27,060 go into your ABLE account in a year. If you earn less than $12,060, the amount you could contribute would be lower.
- Money can be rolled over tax-free from a regular 529 college savings plan to an ABLE account. That means that money which hasn't been or won't be used for college can instead be used for expenses that are approved for usage from an ABLE account.
- If you have an account, you have to make sure that too much money isn't contributed into your account (even if it is other people making the deposits).
ABLE accounts are tricky even without these new changes, so don't go it alone. If you need help with navigation, or you'd like to explore setting up a plan that could include both an ABLE account and a Special Needs Trust, please contact the office at
(571) 328-5795
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Do I Need a Special Needs Trust, ABLE Account... or BOTH?
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Families with disabled loved ones have had to walk a very fine line for many years. There is often a delicate balance between providing their family member who has special needs with the most comfortable life possible, while also ensuring that extra assets or income don't jeopardize their loved one's eligibility to receive essential government benefits like Medicaid and Supplemental Security Income (SSI).
For years the most effective way to achieve this balance was to set up a Special Needs Trust. But the federal Achieving a Better Life Experience (ABLE) Act created Internal Revenue Code Section 529A, which authorizes states to offer tax-advantaged savings accounts for the disabled.
The plan works similarly to Section 529 college savings plans. The ABLE Act allows family members and others to make contributions to a qualified beneficiary's ABLE account. The annual contribution amount is limited to the federal gift tax annual exclusion amount which in 2018 is $15,000. The beneficiary must have become disabled before age 26.
The account grows tax-free and earnings may be withdrawn tax-free as long as they are used to pay for "qualified disability expenses." Qualified disability expenses include health care, education, housing, transportation, employment training, assistive technology and personal support services.
In most cases, an ABLE account won't affect the beneficiary's eligibility for Medicaid and SSI. However, distributions from an ABLE account used to pay housing expenses are countable assets. Also, if the balance of the ABLE account grows beyond $100,000, eligibility for SSI is suspended until the balance is brought below that threshold.
At this point, you may be wondering which would be better for your situation...or perhaps if you need BOTH an Able Account and a Special Needs Trust to get the most out of your special needs plan. It's really best to seek the advice of a qualified lawyer to discuss your unique circumstances. But, here's a quick comparison to help guide you.
Availability
ABLE accounts are available only if your home state offers them or contracts with another state to make them available. Luckily, Virginia does offer them. In fact, Virginia was the first state to offer ABLE Accounts.
Age Restrictions
As previously stated, ABLE account beneficiaries must have become disabled before age 26. There are no age restrictions for Special Needs Trusts.
Qualified Expenses
ABLE accounts can be used to pay only specific types of expenses. Special Needs Trusts may be used for any expenses the government doesn't pay for including "quality of life" expenses such as travel, recreation, entertainment and hobbies.
Taxes
An ABLE account's earnings and qualified distributions are tax-free. A Special Needs Trust's earnings are taxable.
Pay-Back Provision
After the death of the beneficiary, funds remaining in an ABLE account must be used to repay any Medicaid that was used by the beneficiary after the account was established.
A Third Party Special Needs Trust does not have a Medicaid payback provision and
the
grantor (creator) of the trust can determine how the remaining trust assets are to be disbursed at the death of the beneficiary.
There are many other issues that may impact your choice, so it is best to work with an experienced attorney who can help guide you based on you and your loved one's unique circumstances. If you'd like assistance getting started, we invite you to contact the office at (571) 328-5795 to schedule an appointment to discuss your options.
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Service Animals Permitted in Fairfax County Public Schools (FCPS) Buildings
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The Fairfax County Public Schools (FCPS) permits service animals to have access in all its public areas, to include schools, in accordance with federal and state law. A service animal has to be individually trained to do work or perform tasks for the benefit of an individual with a disability, which include physical, sensory, psychiatric, or intellectual disabilities. A service animal is not a pet, and the work or tasks performed by a service animal must be directly related to the individual's disability.
Generally, therapy animals are not considered service animals and are therefore not permitted in the schools.
The ongoing use of a service animal by staff members, parents, or members of the community must be coordinated through the Office of Equity and Employee Relations. The Office of Equity and Employee Relations can be contacted at
571-423-3070
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To coordinate a student's use of a service animal, contact the Due Process and Eligibility section of the Office of Special Education Procedural Support at
571-423-4290
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Free Download of Sheri Abrams' Book "Don't Gamble With Your Social Security Disability Benefits"
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You can download a free copy:
For more information please click
here
to read our Press Release.
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| Our Office Location |
The law firm of Sheri R. Abrams, Attorney at Law is located at:
10467 White Granite Drive
Suite 306
Oakton, VA 22124
(571) 328-5795
This is in the "ServiceSource" building and there is plenty of free and accessible parking.
Our office is also accessible by public transportation.
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| Referrals |
If you know of someone who could use our legal services, please forward to him/her this e-mail newsletter or give him/her our telephone number: (571) 328-5795.
We provide legal services in the areas of Social Security Disability Law, Special Needs Planning, Elder Law, Estate Planning, Special Needs Trusts, Wills and Trusts, Powers of Attorney, Advance Medical Directives (Living Wills), Guardianship, Conservatorship, Disability Planning and Student Loan Discharge.
If you, or someone you know, is involved with an educational event or support group that would benefit from a presentation on any of the areas of law for which we provide legal services, please call us at (571) 328-5795.
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