ANOTHER TOOL IN THE TOOL BOX – The ABLE Act, an Overview

Recently Congress passed and the President has signed into a law a new form of investment account designed to provide a source for accumulation of funds to benefit a disabled person in a way similar to Section 529 accounts used for accumulating funds for qualified tuition programs. 

The “Achieving a Better Life Experience” Act (“ABLE” Act) is designed to benefit disabled persons specifically who are receiving Medicaid and/or SSI. 

The ABLE account is established as part of Section 529 of the Revenue Code and allows a disabled individual to maintain receipt of SSI benefits even though the SSI recipient has an ABLE account that contains assets up to but not exceeding $100,000.00.  If the account grows above that amount, the SSI benefits will be held in suspension until the account drops below $100,000.00, at which time the SSI payments will resume.

Likewise, a Medicaid recipient will not lose eligibility based on assets held in an ABLE account even if the size of the account exceeds $100,000.00.  However, similarly to a (d)(4)(A) trust, the ABLE account is subject to a Medicaid payback provision upon the death of the Medicaid recipient. 

An individual who is receiving SSI or disability benefits under Title II of the Social Security Act is eligible to use an ABLE account for “qualified disability expenses” which include:

·         Education

·         Housing

·         Transportation

·         Employment Support

·         Health and Wellness

The State must create the means to establish the ABLE Account (similarly to 529 accounts) and, although lawmakers have introduced bills, Oklahoma has not yet had time to get that completed.

The ABLE Account provides another relatively simple way of accumulating funds in a significant amount for the benefit of a disabled person, and once it is implemented by the states, it is a potentially useful tool in planning for the long term assistance for a disabled person.  It will take months before the details become clearer on how an ABLE account will work, but it may well be another tool in the estate planning tool box in serving individuals with disabilities.

Curtis J. Shacklett, Esq.

Barber & Bartz, P.C.

525 S. Main St., Ste. 800

Tulsa, OK 74103-4511

Telephone: (918) 599-7755

Facsimile: (918) 599-7756

Email: cshacklett@barberbartz.com

Website: www.barberbartz.com