(ABLE) Act was signed into law. The ABLE Act amends Section 529 of the tax code (which provides for college savings accounts) and authorizes each state to create tax-free savings accounts for disabled individuals. At this point, no plans are available, but Florida, Nebraska and Texas expect to debut their plans by the middle of 2016. The ABLE account will have many of the features of a 529 college savings account, with an expanded definition of qualified expenses, to include costs for transportation, housing, assistive technology, education at any level, and job training. There are a few other differences – the disabled individual will be both the beneficiary and the owner of the account, and will be eligible for only one account in their name. Contributions each year will be limited to the amount of the federal gift tax exclusion (currently $14,000). As it stands now, the beneficiary must have become disabled before the age of 26, but there are efforts to remove the age restriction. Since the law was enacted, it has been modified to remove the requirement that the beneficiary had to be a resident of the state in which they opened the account. The hope is that these accounts will provide a small amount of relief to parents of children with disabilities, whose out-of-pocket expenses can be astronomical, as well as to disabled adults who want to be able to save for their expenses and for their future. In addition, the funds held in these accounts will not jeopardize the beneficiary’s eligibility for needs-based government assistance. These accounts can be used in concert with a Special Needs Trust, which should be prepared by a qualified estate planning attorney. More information is contained in a December 2015 report authored by the National Down Syndrome Society, which played a pivotal role in the passage of the ABLE Act. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. About Fitness for Health: A finalist for About.com’s Readers’ Choice Award for Best Special Needs Resource in the D.C. Region, Fitness for Health, founded by Marc Sickel who also suffers from ADD, specializes in creating personalized, therapeutic programs for children with a broad range of special needs. At Fitness for Health, you get a complete team—including pediatric fitness specialists, physical therapists, and occupational therapists—working together to create a full-service plan of care that’s expertly tailored to your child’s developmental, skill and comfort levels while providing fitness for kids. As a parent, you’re involved every step of the way. Learn more about our therapeutic exercise, occupational therapy services, and physical therapy services today.]]>
Tags: special needs, disabilities, 529 account, ABLE Act