A Look at Three New ABLE Programs Available Nationwide

Last modified: 1 week ago | 2/28/2017

ABLE account map February 2017ABLE accounts are a relatively new planning tool available to
individuals with disabilities.  The Achieving a Better Life
Experience (ABLE) Act, signed by President Obama in 2014, allows
individuals who meet certain criteria to open and hold assets in an
account that will not be counted as a resource for the purposes of
public benefits.  At the same time, the account beneficiary has
more control and access to the funds than with a traditional special
needs trust.

Because ABLE accounts are created under the same IRS regulations
that allow for 529 accounts used to fund higher education, they are
qualified savings accounts that receive preferred federal tax
treatment. In order to take advantage of these incredibly useful
savings tools, the individual’s disability must have had its
onset prior to age of 26.  The disability must also meet the
requirements for either the Supplemental Security Income (SSI) or
Social Security Disability Insurance (SSDI) programs and the
individual must be receiving those benefits or certify that he or she
has the documentation of a physician regarding disability.

Although only 17 states have created ABLE programs so far
(see map from the ABLE National Resource Center), this does not mean
that you or a loved one is barred from opening an ABLE account if you
do not live in one of these states.  A person with disabilities
may open an account in any state that has an ABLE program
allowing out-of-state residents to open ABLE accounts. It is important
to note, however, that an individual cannot have more than one ABLE
account.

Here are details on the programs of three states that allow
out-of-state residents to open accounts:

Michigan launched the MiABLE program on
November 1, 2016. The account can be opened by the individual, a
parent, an agent under a power of attorney, or a legal guardian. There
are five different investment options for MiABLE beneficiaries that
vary in degree of risk and in cost. This means that you have the
option to grow your money in a way that suits your risk tolerance.
Michigan also allows for a state income tax deduction of $5,000 for
individuals and $10,000 for joint filers. Another interesting feature
of the account is that MiABLE has given beneficiaries the ability to
create public profiles to solicit donations from friends, family, and
even strangers, similar to the format used for websites like GoFundMe.

Oregon launched its national program called ABLE for All
in 2016. The program offers three investment options: Conservative,
Moderate and Aggressive. There is also an FDIC-insured cash option
that is appropriate for those planning on spending money from the
account in the near future. ABLE for All will also soon be launching
prepaid cards that beneficiaries can use to access their funds. An
interactive website dashboard allows beneficiaries to set savings
goals for themselves.

Virginia opened ABLE Now Virginia
in 2016 and it is available nationwide to eligible individuals
regardless of their state of residency. The account offers an ABLEnow
Debit Card that gives individuals immediate access to their account.
The first $2,000 deposited in the account is automatically allocated
to the FDIC-insured deposit account linked to the card. Like
Oregon’s ABLE for All, Virginia’s account offers three
investment options — Conservative, Moderate and Aggressive — as well
as a money market account that is 100 percent cash and cash
equivalents.

These are just three of the ABLE account options available to
individuals with disabilities nationwide. It is important to do your
research when selecting an account and to make a determination based
on what is best for you or your loved one. Your special needs planner
can assist in this evaluation process.