Kathleen has 11 years of experience in her current position specializing in ABLE Savings Accounts, also known as a 529. She also has her Masters in speech pathology and is a special needs mom.
Who Came Up With The Idea For ABLE Accounts For Those With Disabilities?
The idea of the ABLE Savings Account was created by a gentleman by the name of Steven Beck, in an effort to provide financial support for his daughter who happens to have downs syndrome.
When was The ABLE SAVINGS ACCOUNT established, who can get an ABLE Account, and lastly, what’s the overall purpose of the ABLE Account?
The ABLE state programs were first established in 2016 after putting it into federal law in 2014. The ABLE Act is one of the largest actions to be taken in favor of the disability community since the Disability Acts in 1990-1991. Since then there are currently 35,000+ plus accounts open and active.
However, the state of Wisconsin is one of 9 states that has not acknowledged the need for ABLE Savings Accounts as of yet. The first state to launch the ABLE Act was the state of Ohio. Nebraska was the next to launch ABLE accounts in their state.
As soon as your account is established, it’s active, and you can begin using it right away.
Any person and or parent/guardian who has someone in their life with a disability has the option to have an ABLE account. However, there are requirements as follows: Diagnosis of your child’s disability as of 26 years of age. Diagnosis needs to be verified by either a doctor and or the social security administration. Please note that the ABLE ACCOUNT is NOT to be used for things NOT related to the person(s) disability. The total amount of funds that a person and or guardian can put into an ABLE account is $15,000 every year. A person with a disability is only allowed on ABLE Account, and that account needs to be authorized by a legal representative.
The Purpose Of the ABLE Savings Account
To accumulate savings without jeopardizing any state funds that you receive. With an ABLE account, the person(s) has the ability to save toward their needs beyond the restricted $2,000 limit that the state allows for the person(s) basic needs. If you’re a person who works, and you have an ABLE account, you can save an additional $12,000 for things ONLY related to your disability.
Please note: that the ABLE account is to save assets, NOT to establish more work hours.
Additional Notes Of Importance
Please also be made aware that ABLE accounts are regulated by the IRS. This means you have to show and keep accurate records of how the funds in the account are used.
If the person(s) is on Medicaid and their balance exceeds a thousand dollars your coverage with them will NOT be suspended.
The QDE (qualified disability expenses)
(The following list is to simply give you a general idea, and does not cover everything.)
Enrollment for The ABLE Account
If they are under 18 years of age, parent/guardian can open an account for their child at any time. If they are an adult then they can enroll themselves.
Please Note: AGE DOES NOT AFFECT OWNERSHIP OF THE ACCOUNT.
Needless to say, no matter how you to enroll for an account, you still learn an array of valuable information. Including, what the fees are related to your account, investing options, and distribution options. Your state will also help you by providing an investment provider to assist you.
Note that each state will have varying information about The ABLE ACT and ABLE ACCOUNTS.
Tammy’s Final Thoughts
Knowledge is Power! Make sure to take advantage of all the resources available through special needs financial advisors, educational seminars and signing up for a benefits analysis.
Each person’s situation is very unique to them. So reach out and keep asking questions to find the best financial fit for you or your loved one. Know that you are not alone on this journey.
Resources used in this post are as follows:
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