By Celia Brown
Last spring we posted information about ABLE accounts from Christopher Sharry . At that time ABLE accounts were not yet available.
Celia Brown, HMEA’s MFOFC Coordinator and parent to Andrew recently opened an ABLE Account – Here is her accounting of their experience .
I was so excited to learn that we can now actually help our children save money – even up to $14,000 annually with a lifetime cap of $100,000. ABLE Accounts are here! And it was relatively easy to get on the Fidelity Investment site and set up an account for our working 36 year old Andrew – fidelity.com/attainable. I navigated through the steps on the website with success – not frequently my experience using on line directions! Then I walked into the Fidelity office near Stop n Shop on route 9 in Shrewsbury and the savings begins!! Fidelity has nine branches in New England. The Shrewsbury site serves all of Central and Western MA. But, again you can do this all on line if you wish. I just wanted to have the experience of walking his check into a bank! Andrew is excited too; he received his first statement recently.
The Attainable: The ABLE Savings Plan
mefa (Massachusetts Educational Financing Authority) serves as the state sponsor for this plan
Information about the ABLE accounts can be found on their web site:
Phone number: 617.224.4813 for Martha Savery
Fidelity Investments manages the ABLE Accounts
Information can also be found on the Fidelity website:
Accounts can be opened via fidelity.com/attainable
More information from last spring’s blog from Chris Sharry worth sharing again!
The Achieving a Better Life Experience Act, or ABLE Act, signed into law in 2014, will soon be launched in Massachusetts. When available, individuals with disabilities that began prior to the age of 26 will be able to open special savings accounts in which they can save money. These accounts will be similar to section 529 education accounts in that they will be used to save money tax-free. The funds contributed to the account is post-tax, but all qualified distributions will be tax-free. Account values, up to $100,000, will be disregarded in determining eligibility for means-tested government programs such as supplemental security income (SSI). Contributions, however, are limited to $14,000 per year from any source.
Although the ABLE account is a positive planning tool individuals with disabilities, there are some limitations that you need to consider. First, Congress limited annual contributions to $14,000 total. Second, unlike third party special needs trusts, there is a Medicaid payback provision for benefits paid out on behalf of a beneficiary.
Even with these limitations, there are several scenarios where an ABLE account can be used to benefit families. First, disabled adults that are working can use the account to shelter the earnings that may push them above the SSI asset limit of $2,000. Even better, unlike a pooled special needs trust account, the disabled individual can control the account themselves. Second, ABLE accounts may be useful to families who want to gift small amounts and do not want to incur the costs of establishing a special needs trust. Just keep in mind, there is a Medicaid payback provision with ABLE accounts, so you must do a cost-benefit analysis to determine whether it is more cost effective to set up an ABLE account or special needs trust.
ABLE accounts, if used properly, will be a very useful planning tool for families. As with any estate planning, a thorough analysis must be done to determine what planning strategies should be used, including ABLE accounts.
Chris is a member of the Center’s Advisory Board. Chris was born and raised in Worcester, Massachusetts. He received his Master’s degree from Anna Maria College, his law degree from New England Law in Boston, and is a member of the Massachusetts bar. His practice is focused on estate and Medicaid planning, asset protection and special needs planning. Chris also founded Assure Wealth Strategies, LLC, a registered investment advisory firm to better serve his existing clients. With his 10 years in the estate planning, asset protection and long-term care planning areas, he sought to take a more comprehensive approach to financial and estate planning. Assure Wealth Strategies helps families plan for the financial needs of a loved one with special needs while preparing for their own retirement. Chris also has a personal connection to this area, his son was diagnosed with autism at age 2. Chris and his wife, Jennifer, live in Oxford with their daughter Peyton, and sons Nolan and Declan.