ABLE Accounts (they are not “Trusts”) are coming to Florida July 1, 2016. ABLE United is Florida’s ABLE program and will start taking participants July 1. ABLE accounts can be very helpful and powerful tools for certain individuals with disabilities. Remember, to use an ABLE account the disability has to have occurred prior to age 26, so the candidates will be limited. If a person can qualify, ABLE United states the account will be able to be opened online in about 15 minutes at their website: Ableunited.com. Also remember contributions will initially be limited to a total of $14,000 per year.
I have been getting a lot of questions about how Special Needs Trust (SNT’s) compare to ABLE accounts. Here are a few of the similarities: Both ABLE Accounts and SNT’s can be exempted from eligibility for Supplemental Security Income (SSI) and Medicaid programs. Both ABLE Accounts and SNT’s can be contributed into by the beneficiary personally and by family members (just recall there are several kinds of SNT’s and you can’t mix the funds within SNT’s).
Differences between ABLE Accounts and SNT’s include: ABLE accounts have limits on what can be contributed annually and SNT’s do not. All ABLE accounts have a required Medicaid payback on death and only SNT’s with the beneficiary’s funds (and not those funded by others, like parents) have a Medicaid payback. ABLE accounts accumulate earnings within tax free and no SNT’s do, so ABLE accounts are controlled by the beneficiary and SNT’s are not. Some post-death expenses are allowed from and ABLE that are not allowed by some forms of SNT’s (such a as a d4A or Pooled SNT). There are other similarities and differences and I am working on a master chart that will set out most of these comparisons. To be continued.