Last week, Governor Nathan Deal enacted a bill called the ABLE Act that allows individuals with disabilities in Georgia the opportunity to create tax-advantaged savings accounts to cover qualified disability expenses.
Funds placed deposited in a qualified ABLE Account will essentially be disregarded when determining a person’s eligibility for resource based government benefits like Medicaid and Social Security.
Increased Financial Freedom
Under the ABLE Act in Georgia, an account can be created for an individual with a disability which allows for contributions of up to $14,000 a year with a maximum lifetime contribution of $100,000.
Although only one ABLE account can be set up per individual with a disability, the account holder is not required to pay any state tax deductions on the account. Anyone can contribute to the account, including the individual with the disability. Funds in the account can only be used for limited purposes.
Some Requirements for an ABLE Account
• Individuals must have a significant disability
• The onset of the disability must occur before turning 26 years of age
• Individuals who already receive SSI or SSDI are automatically eligible to set up an ABLE account.
Do You Need an ABLE Account and a Special Needs Trust?
Short answer. Yes. While an ABLE account provides an individual with a disability greater flexibility and access to their funds, the financial limits on ABLE accounts limit their use for Estate Planning purposes where many families assets, including life insurance may exceed the ABLE limit.
Think of the ABLE account as an extra tool in the estate planning tool box that adds a layer of financial security and flexibility without jeopardizing benefits such as Medicaid which have income and resource limits.
Need help with an ABLE account or Special Needs Trust?
We can help. Attorney DJ Jeyaram is an experienced special needs estate planning attorney and has a special needs son. Contact at DJ@Jeylaw.com or 678.325.3872.
